WTI Crude Oil
The WTI Crude Oil market initially fell on Friday, breaking below the $68 level, and then turned around to form a bit of a hammer. This hammer is a bullish sign, as a sign that traders are possibly looking to break out and above the $70 handle. By clearing that level, the market probably goes to the $72.50 level, as oil continues to show value hunting. The uptrend line underneath should continue to offer support as well, and I think that currently somewhere near the $65 level we would find a lot of buyers as well. The tensions in the Middle East continue to show signs of oil rallying, and I think that will continue to be the case, but if we break down below the uptrend line, that would be a major move. At that point, I think we would drop to at least the $60 level. However, I believe the dips will continue to be the best opportunities you find.
Natural Gas
Natural gas markets broke down rather significantly during trading on Friday, showing the $2.80 level as being far too resistive. We broke down below the bottom of the Thursday range, and then the bottom of the hammer from the Wednesday session. That is a very negative sign, and the ultra-negative candle that is formed suggests to me that the sellers are coming in to push this market back down to the $2.65 level. Now that we had formed a scandal, I believe that $2.80 will continue to be confirmed as the “ceiling” in the overall range. I think short-term trading continues to be the best way to go when it comes to trading this market, and therefore you may want to look to hourly charts or something like that.
