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Increased Activity Yields Same Result as Futures Slip Again
After being limited to a moribund 2.5-cent range Wednesday, theMarch futures contract snapped back to life yesterday as bulls andbears took turns exerting their influence on the market, which ledto a 7.5-cent trading range. Thursday’s 3-cent setback andsubsequent $1.746 settle would be considered an almost non-eventamid typical winter volatility, but the move was a welcome changeto traders who have grown weary of the slight moves and tighttrading ranges over the past month. Those traders reactedaccordingly, burgeoning estimated volume to 86,227.
Despite yesterday’s losses, some sources remained optimistic intheir price outlook. “It could have been a lot worse,” commentedone cash marketer who thought the confluence of bearish reportsWednesday from the American Gas Association and the NationalWeather Service would have dealt more damage to the futures market.
But Tom Saal of Miami-based Pioneer Futures took a slightlydifferent tact. “You can look at [Thursday’s] market in two ways:what it did do and didn’t do. It was able to trade an outside day,making a higher high and a lower low than Wednesday, but it failedto close at that high.” Selling by “a large commercial player”aided by some fund selling below $1.76 was responsible for thedownward price action in the afternoon, Saal continued.
Looking ahead, he feels that based on the large short positionstill held by non-commercials the market could be in store for somemoderate short-covering to lift the March contract by a dime beforeits expiry next Wednesday.
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