WTI Crude Oil
The WTI Crude Oil market initially fell on Friday but turned around to form a hammer. The uptrend line that had previously held this market up seems to be resistive, and we cannot break above it on Friday. This is market memory at its best, and I think that the next couple of sessions will be very important. If we can break above the uptrend line, the market could go as high as $65, but I think that will be a bit too resistive. Alternately, if we break down below the hammer for the Friday session, that should turn things into a “hangman”, and send this market down to the $58 level. Beyond there, we could break down significantly. When you look at the stochastic oscillator, it does suggest that perhaps we are ready to cross over and drop. Either way, I don’t have any interest in buying, and I think it’s only a matter of time before we can start shorting.
Natural Gas
The natural gas markets have dropped a bit during the trading session on Friday, as we continue to see weakness. The $2.60 level offers support that extends down to the $2.50 level, and I think that if we can break down below there it’s likely that the market would fall apart. However, this market has broken down so rapidly and significantly that I think it is only a matter of time before we get some type of bounce. That bounce should be a nice selling opportunity, and I think it will be hard-pressed to break above the $3.00 level. Any rally at this point in time should be exhaustion just waiting to happen, and I think that the rallies will be looked at with suspicion, and I would be patiently waiting to sell at much higher levels. At this point, I don’t have much of a trade going.
