WTI Crude Oil
The WTI Crude Oil market went back and forth during the day on Monday, finding the area above the $40 level to be a bit too resistive. Because of this, we ended up forming a bit of a shooting star, which looks fairly neutral in the face of a hammer on the previous session. Ultimately, the $38 level below is supportive, so I am going to wait until we break below there in order to start selling. I think that a short-term rally could occur if we break above the top of the range for the Monday session, but I find it difficult to believe that were going to break above the $42 level. So having said that, it’s very likely that we will have a lot of volatility regardless of what happens next.
Natural Gas
The natural gas markets initially fell during the course of the session on Monday, but found enough bullish pressure to break well above the $1.80 level, and test the $1.85 level. A break higher from here should have selling pressure sooner or later, and I also believe that the $2 level is essentially the “ceiling” in this market right now, so I’m waiting to see whether or not we get some type of exhaustive candle in order to start selling in what has been a very reliable downtrend. With that being the case, I have no interest in buying and I believe that eventually we could go as low as the $1.60 level.
If we break above the $2 level, that would of course be very bullish but I have a hard time to imagine that going on for any real length of time anytime soon. So having said that, I am simply waiting for an opportunity to start selling as there is no real reason to believe the natural gas is going to gain for any real length of time.
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