WTI Crude Oil
The WTI Crude Oil market initially tried to rally during the day on Thursday but found the $50 level be far too resistive to continue going higher. By doing so we ended up forming a shooting star which of course is a very negative candle and at this point in time I think it is probably just a sign that we are going to have to pullback. This makes a lot of sense, the $50 level had been so resistive back in October, and we are bit extended at this point. However, I see quite a bit of support down at the $48 level, so I think any pullback at this juncture will be short-term in nature at best. I also recognize that if we can break above the top the shooting star that should be a buying opportunity so at this point in time I much more apt to be a buyer that a seller.
Natural Gas
Natural gas markets exploded to the upside during the day on Thursday, gaining roughly 10%. However, we did pullback somewhat significantly from the $2.20 level, which is the real barrier that we need to overcome. Because of that action on a believe that it is probably best to simply step out of the way, and see what kind of daily candle we get today. If we get a close above the $2.20 level, I believe that the market will then reach towards the $2.30 level. Alternately though, we could get an exhaustive candle in that might be a nice selling opportunity as the market will trying to reenter the consolidation area that we had been in for the last couple of months. With that being said, I will report tomorrow when I see, but quite frankly am a bit surprised by the massive surge that we sold during the day on Thursday. Typically, if we see wild counter moves like this, it’s best to let it prove itself.
