WTI Crude Oil
The WTI Crude Oil market rose slightly during the course the day on Friday, using the $38 level is a bit of a platform to go higher, but given enough time we should run into a significant amount of resistance near the $40 handle. The biggest problem that I see in this market is the fact that the US shale oil producers are getting ready to flood the market at $40, so having said that it’s difficult to imagine that were going to go straight up from here. In fact, I would love to find some type of exhaustive candle in that area to start shorting. In the meantime, I think short-term traders will push this market higher for the next couple of sessions.
Natural Gas
Natural gas markets initially tried to rally during the day on Friday, but turned right back around to form a bit of a shooting star. The shooting star of course is a very negative sign, so I believe that if we can break down below the bottom of this candle, the market will drop from here and try to reach down towards the 1.60 level. Obviously, this is a market that has been very bearish for quite some time, and I don’t think that it’s changed at all. This bounce has been a nice opportunity for sellers to get involved again, and I believe that’s what you are about to see again. With this, I believe it’s only a matter of time before this market reaches back down to the lows again, so with this I’m selling yet again.
Even if we break higher, the market will more than likely struggle to get above the $2 level anyways, so that would only invite more selling in my estimation. Supply is still far too strong for demand to take care of at this point in time, and should continue to keep prices low.
