WTI Crude Oil
The WTI Crude Oil market initially fell during the course of the session on Monday, but found the $47.50 level to be supportive enough to turn the market around and form a bit of a hammer. It is immediately preceded by a shooting star, so there is obviously resistance. However, we have been grinding higher and I believe that it’s only a matter of time before the momentum shifts to the upside. The $50 level above of course is a large, round, psychologically significant number, and as a result it will probably take quite a bit to break above there. It was also an area that had caused quite a bit of resistance back in October, so of course there will be a lot of interest in this general vicinity. I still believe short-term pullbacks will be buying opportunities though.
Natural Gas
The natural gas markets shot higher initially during the day on Monday, but turned right back around somewhere near the $2.12 level, showing quite a bit of resistance as we ended up forming a bit of a shooting star. This is an absolutely ugly candle, and as a result it looks as if we are going to try to break down below the $2.00 level, and perhaps the hammer from the Thursday session. Once we break below that hammer from Thursday, I feel that this market and reaches towards the $1.90 level and possibly even lower than that.
This is a market that still has horrific fundamentals, so with that being the case is likely that the sellers will continue to jump back into the market every time we see some type of resistant candle. I have no interest in buying this market, and believe that sooner or later the sellers will take over and continue to push much lower as the momentum seems to be shifting back towards the downside.
