WTI Crude Oil
The WTI grade of crude oil had an extraordinarily bullish day on Friday, as petroleum markets around the world bounced. In fact, the market gained 9% which is obviously extraordinary. However, looking at the charts it doesn’t seem quite as impressive. True, we are testing the resistance zone of the $32 region, but quite frankly I believe that a break out above here is going to run into serious trouble closer to the $36 level. I would actually welcome this rally so I can start shorting this market from a higher level.
I believe that the market is probably going to go down to the $25 handle given enough time, but at this point it’s probably a bit oversold. True, you could go long in this market on a continuation of the move, but I think it’s going to take very little to spook the markets into a negative move again.
Natural Gas
The natural gas markets had a very calm day during the session in contrast to the WTI market, as we essentially went nowhere. Because of this, it looks like the market is struggling to pick up traction, and the winter storm in the northeastern United States seems to have done nothing to help this market. Because of this, I believe that it’s only a matter of time before we roll over again and start falling so I am looking for opportunities to sell.
If we can break down below the $2.10 level, I feel that it will signal that we are getting ready to fall again. Any rally at this point in time will have to contend with a significant amount of bullish pressure above, so at that point in time I think that an exhaustive candle could be a selling opportunity as well. At this point in time, I have absolutely no interest in going long.
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