WTI Crude Oil
The WTI Crude Oil market rallied a bit during the day on Monday, breaking the top of the hammer from both Friday and Thursday of last week, so it shows signs of significant strength above that could cause a bounce to the $64 level. I think that the $64 level above should be resistive though, mainly because we have a previous uptrend line that should be resistive is sitting just above. Ultimately, I think that as soon as we get some type of exhaustive candle, I will be more than willing to start shorting this market. I think that the market sees the $60 level as a massive support level, but I think that we will eventually break down there and go to the $58 level. Ultimately, I’m not interested in buying unless we make some type of “higher high.”
Natural gas markets were slightly negative during the day on Monday, but ultimately ended up forming a bit of a hammer. That’s a bullish sign in general, and I do think that we will continue to go higher. I think that the market will eventually reach out to the upside, but it will struggle at the same time. I recognize that there is a lot of negativity attached to natural gas, as we have so much in the way of oversupply longer term. However, in the short term it looks as if inventories are continuing to shrink. However, once we get out of the cold weather in the United States, that should correct itself, and I believe that any rally at this point is going to be a bit of a “dead cat bounce” that you can take advantage of. Patience will be needed to take advantage of that scenario though.