The March contract wandered off a small cliff yesterday whileentering its final week on the board, as spring fever apparentlyreached the Nymex gas pit. The March contract opened with a hugegap lower to $2.555 before cascading down a total of 11.8 cents forthe day and closing at $2.515, slightly above its $2.490 low. TheApril contract closed down 10.6 cents to $2.544, and May dropped 9cents to $2.564.

“Oh, I think it’s definitely headed lower,” Ira Hochman saidconfidently. Hochman, of New York-Based Trot Trading Corp., seessome support at $2.47 and then again the low $2.40s. “I would hopeit would hold up there in the low-$2.40s but if it doesn’t you justhave to sell them into the close. It might hold at $2.47 and make arebound” but with the warming trend on everyone’s minds it’s hardto expect that it will, he said.

Tim Evans of Pegasus Econometrics Group was less confident aboutmarket direction, however. Evans now refers to gas futures as “thepoltergeist, a playful and mischievous beast.”

“That’s the way this market has tended to behave lately, goingjust far enough to get those buy stops. Last week we saw that verynicely on the April contract. They pushed it up to a newlife-of-the-contract high by 3.5 cents… And it’s like ‘OK, well,we can’t go down; we have to go up. Wrong.”

After witnessing so many unexpected turns in the market thiswinter, Evans said he’s “conditioned to flinch. Yeah, today’s droplooked horrible, but do I consider this a dead market now? No, Ican’t say that I can. We could rally 6 to 8 cents before the[storage] numbers and maybe another 3 or 4 cents after the numbers,and then who knows! Then, it will either fall apart or crawl alittle further to the upside. If you’ve got a profit, take it.Don’t leave positions on the table for any great length of time.”

For the time being, the National Weather Service believes thiswarming trend will stay with us for another six to 10 days. The NWSsaid yesterday it sees above- to much-above normal temperatures forthe eastern three-quarters of the nation. A bubble of much-abovenormal temperatures encompasses the Mid-Atlantic and part of theSoutheast, while a sliver of below-normal temperatures are expectedalong most of the Pacific Coast and part of the Pacific Northwest.Normal temperatures are expected over the Southwest and part of theNorthern Plains.

“In real terms, the weather right now is just too high. Even inthe Northeast, which usually lends some support to the rest of themarket, it’s way above-normal,” said one gas marketer. However, heisn’t expecting a market tailspin. “Personally, the screen stilllooks range-bound to me. It doesn’t look like it wants to drop[much more]. It’s just a gut feeling, but I don’t think this markethas the weakness to tank into the $2.20s.”

Evans concurred, saying, “I don’t think the fundamentals arereally bearish enough or consistently bearish enough to sustain adowntrend. What we’ve been getting are bearish weather forecaststhat have not been fully panning out in actual weather. And thestorage comparison continues to be supportive. The market canattempt to trend lower, but [over the past few weeks] it has beenbrought up by the weekly AGA figures…”

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