WTI Crude Oil
The WTI Crude Oil market initially tried to rally during the day on Monday but as you can see struggled quite a bit at the $46 level, which has been resistance previously. In fact, we ended up falling significantly during the day, and closing towards the bottom of the range. With that being the case, we could very well see a continuation of bearish pressure, as the market will probably go looking for the $42 level next. We could get a bounce there, but regardless what happens next I think it is only a matter of time before we get quite a bit of volatility and bouncing when it comes to this particular market anyways. There is a lot of noise above that should continue to be resistive, but there is quite a bit below as well.
Natural Gas
The natural gas markets gapped higher at the open on Monday, and did very little afterwards. With that being the case, the market ended up forming a bit of a neutral candle. That neutral candle suggests that we are going to stay within the consolidation area that we have been in for some time. The $2 level below is of course supportive, and the $2.20 level above is resistive. Expect a lot of noise and bouncing around in this general vicinity.
The market has been in a very bullish trend lately, but I still believe that we are in an overall negative trend for the longer term. With that, I am much more comfortable shorting this market, especially near the $2.20 handle. A break down below the $2.00 level would be a negative sign, and could send this market down to the $1.90 level without too much trouble. On the other hand, if we do break above the $2.20 level, that would be a very bullish sign and probably send this market looking for the $2.30 level.
