WTI Crude Oil
The WTI Crude Oil market rallied a bit during the trading session on Friday, but the New Year’s Eve session of course would have had very little in the way of liquidity. We are very negative at this point and have been selling off for quite some time. The 50 day EMA is above the recent action as well, so I think it is only a matter time before the sellers come back in, as the $50 level above will be massive resistance. I think a short-term rally could be coming back into the marketplace, but it will be faded as there are a lot of concerns about demand for crude oil. I do suspect it’s only a matter of time before OPEC does something drastic, but right now they don’t seem to have the ability to let the market.
Natural Gas
Natural gas markets gapped lower to that in the year, slamming all the way down into the $3.00 level. The market looks very likely to find support at this large, round, psychologically significant number, and we could turn around to fill the gap. The market above will cause a lot of volatility and was interesting to me is that the 20 day EMA has just crossed below the 50 day EMA. Ultimately, I think that rallies will eventually offer a nice selling opportunity, as the gap will be filled rather quickly. We could continue to go lower, but that’s essentially “chasing the trade”, and that’s a great way to lose money. Ultimately, I think rallies that show signs of exhaustion on shorter-term charts will be nice selling opportunities. I think that a couple of days of positivity may be coming, but that should only give us more opportunity to short this oversupplied market.
