WTI Crude Oil
The WTI Crude Oil market fell yet again during the session on Monday, slicing through the $32 level. Quite frankly, this is a very easy market to trade at this point in time. Every time this market rallies, it appears that the sellers returned to punish this market yet again. After all, the crude oil markets are very sensitive to the value the US dollar, which as you know continues to rise, and of course is very sensitive to the fact that there is a serious lack of demand.
I believe one story that is not mentioned nearly enough is the fact that the Chinese industrial numbers are softer than anticipated. Remember, there are 2 major consumers of crude oil in the world: China and the United States. Because of this, I believe that this market should continue to go lower. A break below the lows of the session on Monday is a sell signal, just as rallies show signs of struggling.
Natural Gas
The natural gas markets fell during the course of the day on Monday, slicing below the $2.40 level. Because of that, the market looks as if it is trying to reenter the previous consolidation area, which extends down to the $2.25 level. On top of that, I have a downtrend line in this market that has held so far. I will be the first to admit though that it looks as if the buyers are really starting to press the issue at this point.
Colder temperatures are showing themselves in the northeastern part of the United States, and as a result there will most certainly be a pickup in demand. That could send this market into an uptrend for the time being, but I still believe in the longer-term downtrend as there is simply more natural gas than we can use at the moment. On a move above the $2.55 level, I believe this market will start to change the trend for the next several months. On the other hand, if we can break down below the $2.25 level, that would be extraordinarily bearish.
