WTI Crude Oil
The WTI Crude Oil market bounced during the day on Thursday, but continues to find resistance near the $43.50 level. Ultimately, this is a market that has a significant amount of bearish pressure on it, and I believe that we are going to reach towards the $42 level underneath. A break above the $43.50 level should send this market looking for the $45 level. I have no interest whatsoever in buying this market, because quite frankly the oversupply issue continues to haunt the market. Once we break down below the $42 level, the market should then go down to the $40 level which is a longer-term support level. Either way, expect a lot of volatility because of the massive pressure that we see in the market. I prefer to sell rallies as it gives us an opportunity to build up momentum.
Natural Gas
Natural gas market initially tried to rally during the day but found enough resistance above and near the gap to turn things around and form a shooting star. The shooting star of course is a negative sign, so if we can break down below the bottom of the shooting star, the market should then reach down to test the $2.75 level, which is massively supportive. Ultimately, the market should continue to be negative as the oversupply issue is a major issue, and a breakdown below there in this market looking to the $2.50 level. That being said, I believe that the markets continue to be volatile, because a natural gas markets of course always are.
If we did break above the top of the gap, the market should continue to go much higher, reaching towards the $3.15 level. Buying this market is all but impossible, and the higher it goes, the more interested I am in selling.
