WTI Crude Oil
The WTI Crude Oil market initially fell slightly during the day on Friday, but found the $45 level be supportive enough to turn things back around. However, there is a lot of noise just above that should continue to offer resistance. I believe that sooner or later the sellers will return and therefore I’m looking for an exhaustive candle in order to short this market. We have broken down below a longer-term uptrend line, and therefore I think that we continue the even longer-term downtrend. Ultimately, I believe that the US dollar will continue to strengthen, and as a result it should continue to weigh upon the value of crude oil in general. On top of that, you have to worry about demand as the inventory number was so much stronger this week.
Natural Gas
The natural gas markets fell slightly during the course of the day on Friday, but turned right back around as the $2.70 level formed a hammer. This is a market that has been very strong for some time, and it now looks as if we are ready to go higher again. A break above the top the hammer, we will struggle the $2.80 level, but given enough time we should reach towards the $3.00 level. With this, the market should continue to be very volatile with an upward bias, and a lot of this will be affected by the hotter than usual temperatures in the United States currently.
Ultimately, I believe that this market does fall over the longer term, but in the meantime it looks as if we are going to have to make another attempt to break out to the upside. I will be watching longer-term charts, and of course will jump on this market as soon as we see selling opportunities from a longer-term move. In the meantime, this is a short-term buy.
