WTI Crude Oil and Natural Gas - 5 February 2016

WTI Crude Oil

The WTI Crude Oil market tried to rally during the course of the day on Thursday but found far too much in the way of resistance above at the $38 level. By doing so, we ended up forming a shooting star which of course is the most negative candle that you can form as far as technical analysis is concerned. I believe that if we break down below the bottom of this shooting star, the market should very well find itself heading towards the $35 level, and quite frankly I believe that since we can trade this commodity at the moment, to the downside.

Even if you break above the top of the shooting star, you still have to deal with quite a bit of resistance between $40 and $42, so I believe that any rally will simply be an opportunity to sell from higher levels as it has been for quite some time.

WTI

Natural Gas

Natural gas markets fell a bit during the course of the session on Thursday, breaking below the $2 level. By doing so the natural gas markets are starting to test the lows that we have recently made during the month of December. I believe that the market will continue to go much lower, but we may have to have a little bit of a bounce to build up momentum. Regardless, look at rallies as opportunities to sell on signs of exhaustion, and of course a fresh new low would also be the same.

NatGas

The US dollar has been declining recently, but quite frankly that isn’t even a concern in this market at the moment as the supply is simply far too strong for the demand. Given enough time, I fully expect to see fresh, new lows and natural gas supply cannot get out of its way.

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.