Natural gas prices plunged more than 10% last Monday after Hurricane Dean turned away from the U.S., the biggest one-day drop in four years. Then last Tuesday, prices fell another 3.2% after Dean weakened to a Category II storm, and September contracts hit $5.85. But prices came right back on Wednesday to climb back above $5.85, which held today. This sets up a good-sized rebound move at least to the $6.50 breakdown point.

The move in gas matches a corrective pattern in crude oil that started at the end of July and has brought prices down from $78 a barrel to just under $70. This is the same consolidation range that we saw in mid-June, before the breakout to $78, and I expect it to end the same way. These full tests down to the last breakout level shake out as many bulls as possible, before the trend resumes. In this case, summer driving season is coming to a close and there haven't been any serious hurricanes, yet oil prices are still near $70 as we enter the heavy industrial use period in the fall. With China growing well above that government's 10% target and world production flat to falling, it isn't hard to see why we keep getting higher lows and higher highs in oil prices.