WTI Crude Oil
The WTI Crude Oil market broke higher during the session on Friday, breaking above the top of the range for the Thursday session. The market ended up rallying over 5% during the day, testing the $40 level for resistance. That is of course a large, round, psychologically significant number. Ultimately, and exhaustive candle would be a nice selling opportunity, even though it does look like we do have quite a bit of bullish pressure. Ultimately though, I am a bit hesitant to buy this market for several different reasons.
The impending April 17 meeting of oil producing nations could have massive implications on the market, which seems to be suggesting that perhaps there will be some type of production freeze. However, I find it difficult to imagine that we are going to get that due to the fact that they not only very rarely agree, but the reality is that the Iranians are very unlikely to cut production. With this, an exhaustive candle is exactly what I’m looking for to start selling.
Natural Gas
The natural gas markets initially tried to rally during the course of the session on Friday, but continues to find quite a bit of resistance at the $2 level, as we see quite a bit of bearish pressure. The fact that we formed a bit of a shooting star only as more credence the idea of the down trend continuing.
On a break below the bottom of the range for the session on Friday, it is very likely that the market will reach down towards the $1.90 level, and then perhaps even lower than that and towards the $1.80 level. With this, I believe that the sellers are about ready to take over yet again as the market continues to show signs of weakness over the longer term, and even with this nice rally lately, we are still very much in a bearish attitude.
