Traders with a penchant for market volatility and large priceswings may want to think twice about scheduling that three-dayweekend. Mondays, as of late, have been a roller coaster ride fornatural gas futures, with either double- digit increases (Oct. 26and Nov. 2) or declines (Nov. 9) welcoming traders back from theweekend. And the market held true to form yesterday, when forecastscalling for normal and above-normal temperatures managed toinspire fund, local and commercial sellers to push the Decembercontract to its two-week low. But in contrast to the declines lastMonday which came in a selling frenzy during the final twentyminutes of trading, yesterday’s price erosion was an all day affairthat left December down 15.4 cents to $2.305.

In addition to forecasts calling for warmer weather for much ofthe nation, sources agreed Monday’s decline was also brought on bya need for some convergence between cash and futures. Thefuture-cash spread so far this month has varied widely-trading atmore than 30 cents at times this month. But cash prices showed somereluctance to follow futures step-for-step yesterday, and as aresult basis shrunk to about a dime. NGI’s Henry Hub Index fortoday is $2.20.

A San Antonio-based marketer saw good buying from utilities inthe cash market and thinks it will be cash prices that providesupport for a foundering futures screen. However, a Houstonmarketer felt the forecasts for the rest of November might be morethan the market can withstand. “There’s ten days of hard, mildweather ahead of us, and that could help spell an early end to thewinter. It could take a month at least to make up that extra gas,and its really hard to make up a month.”

In daily technicals, Tom Saal of Miami-based Pioneer Futurestargets December support for today at $2.27, which is the bottom ofa large wedge formation. The top of the wedge, he adds, is safelyout of reach for now in the $2.67-68 range. Saal admits the marketwill be tested in the days ahead, but is not ready to give-up onDecember quite yet. “Because the expiration comes six days beforethe last day of the month, the script will not be written untilexpiration day,” he said. The December contract expires nextTuesday, Nov. 24.

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