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For: Wednesday 03-10-2010

Bear Going Into Hibernation?

The bears have been reaping all the benefits and probablythe profits in the natural gas over the long run. We have the market going into a new swing low but we are not seeing any follow through in this market. If we start to see the bears get complacent, we may experience a short covering rally. We will look to buy call spreads on a close above near term resistance.

Aggressive traders may opt to use futures. As always please consult your personal broker at Great Pacific Trading Company to see if this trade is suitable for your account.

Trade Recommendation: On close above 5350 versus the May futures in the next week and a half, buy May 550 call, sell two 620 calls and sell the 480 put for a debit if 65 ($650) a limit. Risk 150 points on the trade initially. (>$1500 not including commissions and fees), Look to take profits if the market trades to the 5800 level.