WTI Crude Oil
The WTI Crude Oil market rallied on Thursday, but found enough resistance above to turn around to form a bit of a shooting star. This happened on Wednesday as well, so it looks like we may be trying to rollover a little bit. The Crude Oil Inventories announcement came out much more bearish than anticipated, although I am the first to admit that the reaction was mild to say the least. I think a lot of the pullback comes more to the fact that liquidity is drying up as we are heading into the New Year’s Day celebrations, so short-term selling might be possible, but that’s about as exciting as this market is going to get. If we can break above the $55 level, the market should then go to the $60 level. A breakdown from here should send the market down to the $52 level next.
Natural Gas
The natural gas markets fell on Thursday, testing the $3.75 level for support. The $3.75 level offered resistance previously, and now should be rather important. If we can break down below there, the market will probably head to the bottom of the gap from a couple of sessions ago, which is the $3.68 region. A breakdown below there should send the market to the $3.5 level underneath. More than likely, we will see some type of supportive candle in this region to start buying though, and that’s essentially what I expect.
Colder temperatures in January than expected have recently been forecasted, and that’s had a bit of a bullish effect on this market, but in the end the oversupply concerns will continue, so I think that longer-term charts will eventually fire off a signal to start selling again. Currently we don’t have it, but I recognize that we are getting close to a very resistive region.
