It was short but sweet for bulls in Wednesday’sholiday-abbreviated trading session as gas futures rebounded froman early and brief foray into negative territory to notch its 15thgain in 17 trading sessions. Adding to a $2.00-plus price spike offlows etched Oct. 31, December clawed 16.9 cents higher Wednesday toclose at $6.577. Meanwhile January finished up 15.2 cents at $6.584after posting a new all-time commodity high at $6.70.

For Nymex local Ira Hochman, the key levels the market needed toremain above were $6.30 and $6.34 Wednesday. December broke beneath$6.34 early in the day, but held at $6.30, prompting a retest of$6.37. But it turns out, $6.37 proved to be little more than aspeed bump as the market exploded higher in two distinct buyingsurges. After the first buying frenzy delivered prices to the midto upper $6.40s, a second wave propelled prices to $6.61-62, whichneatly corresponded to a 50% Fibonacci extension above the $5.87 to$4.38 move, basis December futures. Looking ahead, Hochman predictsthat a failure to punch through further market resistance at $6.65could spawn some profit-taking this week. A move below Wednesday’s$6.30, and the market could be in store for a multi-day correction,he continued. Also on the technical radar scope is $7.36, which is100% Fibonacci extension of the aforementioned $5.87 to $4.38 priceerosion. Meanwhile, Elliot Wave analysis, which has been prettysharp on this move up, says Hochman, points to $7.20.

However, technicals may take a back seat to good old fundamentalanalysis come Sunday evening and Monday morning, when the marketwill not only have fresh weather forecasts, but also the newstorage numbers to grapple with.

According to the American Gas Association, which released itsweekly report after the market closed Wednesday, 94 Bcf waswithdrawn from underground storage facilities during the weekending Nov. 17, decreasing working gas levels to 2,648 Bcf or 80 %full. Measured against last year’s 20 Bcf draw-down and thefive-year average of 52 Bcf, the report was bullish. In fact, notsince 1997 when 108 Bcf was pulled from storage has the AGArecorded such a large withdrawal so early in the season.Expectations ahead of the report also failed to stack up, astraders were generally looking for a 50 to 100 Bcf withdrawalnumber.

However, one bear trader was able to find a silver lining in anotherwise bullish maelstrom. “The West contributed more than itsshare to the withdrawal figure. If it hadn’t been for the 31 Bcfout West, the total storage figure would have been much lower.” Hemay have a point. Not since the third week in December of 1998 when38 Bcf was withdrawn has the West pulled so heavily on gas stocks.Comparatively, this week’s six-year average withdrawal in the Westis just 1.3 Bcf.

Bulls, on the other hand, contend that the large storage draw inthe West is just a harbinger of things to come for the East. Whiletemperatures in California were setting records the week beforelast, cool temperatures didn’t hit the rest of the country untilthe weekend of Nov. 18-19. As a result, large withdrawals in theEast will be reflected in this Wednesday’s storage report, tradersagreed.

While it is clear that bulls and bears may differ on theirinterpretation of last Wednesday’s storage report, both agree that itwould be an active Access trading session Sunday evening when themarket reopens. In a rare occurrence since the AGA pushed forward itsrelease from 4 P.M. (ET) to 2 P.M. (ET) back in March, the market willhave to wait until Sunday night or Monday morning to react to thestorage news (check back at intelligencepress.com on Monday morning forintra-day updates).

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