WTI Crude Oil
The WTI Crude Oil market broke higher during the course of the day on Monday, as we are testing the $38 level. This is a pretty significant move higher, but at the end of the day I still have a certain amount reservation for the longer term, simply because the US shale producers are going to flood the market somewhere near the $40 a barrel level. That being said, it looks like short-term traders will continue to try to push this market higher. I personally don’t like the idea of it because although it looks very healthy at the moment, in the big scheme of things we are still very beat down. I am the first person to admit that it looks like the trend is trying to change, but the real fight is just above, somewhere near the $40 level.
Natural Gas
The natural gas markets tried to rally during the day on Monday but found the area above the $1.70 level to be a bit too resistive to continue going higher. Because of this, the market should continue to see quite a bit of resistance above, and as a result I am looking for exhaustive candles to start selling natural gas again. In fact, I’m willing to do it off of short-term charts which is something that I don’t typically do. The $1.70 level was previously supportive, and it should now be quite a bit of resistance.
Given enough time, I believe that this market will reach towards the $1.50 level, and even if we rally from here, I have no interest in buying. I simply see no reason why natural gas would go higher, especially considering we are exiting the winter season in the northeastern part of the United States. Demand will continue to fall off, and supply of course will continue to be absolutely overwhelming at this point in time.
