WTI Crude Oil
The WTI Crude Oil market has initially pulled back a bit during the trading session on Monday, only to turn around and form a hammer. The $66 level has offered a bit of support, and I think we will more than likely continue to try to reach towards the $68 level. However, the $64 level being broken to the downside would be very negative. That could send this market down to the $60 handle, and at this point I think there are a lot of different moving pieces. The Middle East will of course have an influence, and intentions continue to strengthen there, that could drive oil prices higher. Otherwise, if we continue to build inventory, that could be very bearish. The US dollar strengthening could also provide negative pressure on oil as well. We are currently testing significant support.
Natural Gas
The natural gas markets rallied during the day but continue to see a lot of resistance at the $2.95 level. There is a significant amount of resistance between Terry and the $3.00 level, an area that of course has a lot of psychological importance. I think at this point; short-term rallies are to be sold and I think that it’s only a matter of time before we continue to see more of the overall consolidation that has been such a mainstay of this market. If we did break above the $3.00 level, that would be very bullish, and perhaps in the market to the $3.10 level. However, we are a bit overstretched, and I think that the next impulsive move gives us an idea as to where we go longer-term. I know that we still have plenty of oversupply in the ground, so I think rallies are limited.
