WTI Crude Oil
The WTI Crude Oil market fell initially during the day on Thursday but found enough support at the $26 level to turn around and form a hammer. This is a very bullish sign, but at this point in time I think that only the truly foolish would step into this market and start buying. I believe that it’s only a matter of time before the resistance above would turn this market back around, and as a result I don’t feel that it’s going to be easy to go long off this market. I believe every time this market rallies, you have to start thinking about shorting, especially when we see signs of weakness. There is simply far too much in the way of supply for the demand to take out at this point.
Natural Gas
The natural gas markets initially tried to rally during the course of the day on Thursday, but struggled at the $2.10 level and ended up turning around to form a fairly negative candle. We are below the $2 level again, and then of course suggests that we are going to continue going lower. Ultimately, the market should then reach down towards the $1.70 level, and perhaps continue even lower than that. Quite frankly, there’s no real argument to start buying this contract right now and as a result I’m simply sitting on the sidelines and waiting for short-term rallies in order to start selling yet again. I don’t really have a scenario at this point in my mind that would have me buying this contract.
The demand for natural gas will start to taper off even more, as the cold months are starting to come to a close in northeastern states. With that, America will demand less natural gas, and the potential slowdown economically of course will drive down demand as well. At this point, there’s no way to buy this contract.
