WTI Crude Oil
The WTI Crude Oil markets fell during the course of the session on Monday, crashing into the $43 level. That level should be supportive, but at this point in time it looks like we are in fact going to continue to go lower. If we can break down below the bottom of the range for the day on Monday, it’s likely that we will continue to go even lower, perhaps reaching towards the $40 level. I believe that we are now morally over into a downtrend, and as a result I can only sell this market. We are now well below the 200-day exponential moving average, and should continue to see quite a bit of destruction of price. There is a serious lack of demand, and the US dollar of course continues to be strong, which works against the oil market.
Natural Gas
The natural gas markets fell during the course of the session on Monday, breaking below the $2.75 level. Ultimately, there is a lot of support just below, so it’s very likely that we could find some type of supportive candle. A break above the top of the range for the day is positive, but I think at this point in time we are simply going to grind sideways in a very tight range as the market has to decide where it’s going to ask. I think that we will probably try to test the $3.00 level again, as the level course has a large psychological significance due to the fact that it’s a round number. But beyond that, it’s very likely that we have to test it more than once as we typically do for large numbers. If we do drop below the $2.50 level, it’s very likely that this market will continue to grind lower at that point in time, and I would be a seller. However, this point in time I think we are a long way from there.
