WTI Crude Oil
The WTI Crude Oil market initially fell on the open on Friday, but then turned around to test the $50 handle. It looks as if we will try to break out, and if we can clear the top of the shooting star from Thursday, I feel that the market goes higher. A breakdown below the bottom of the Thursday candle would be negative, but I think that it looks very bullish currently, and I think that eventually the buyers will take out the $50 handle, at least for the short term. Volatility should continue, but quite frankly I think that the buyers are a little bit more serious than the sellers currently. Once we do breakout, I suspect that the $52 level will offer a bit of resistance.
Natural Gas
Natural gas markets had a very negative session on Friday, reaching towards the $3 level before bouncing. I suspect that we could have a short-term buying opportunity, followed by a much more significant selling opportunity. On a bounce, I am going to stand on the sidelines and start selling at the first signs of exhaustion, just as I would be a seller of a breakdown below the $3 handle. I don’t have any interest in buying natural gas, least not until we break above the $3.10 level. If we do, then that changes everything but in the meantime, I think this is more of the same that we have seen for some time. Natural gas markets have been very choppy, but quite frankly they have paid up nicely if you have shorted every time they’ve gotten a little bit to bullish. The situation in the Gulf of Mexico has not affected the natural gas markets in any significant way for any length of time.
