WTI Crude Oil
The WTI Crude Oil markets fell during the course of the session on Thursday, testing the $32 level. That area offered enough support to turn the market back around, and by doing so we ended up forming a nice hammer. The hammer of course suggests that we could see buying in this area, but quite frankly I think that this is more or less just going to be position squaring ahead of the jobs number. Any rally at this point in time in my opinion is a perfect selling opportunity and I would anticipate seeing quite a bit of resistance of the $36 handle.
On the other hand, we can break down below the bottom of a hammer, and if we do the market should reach towards the $30 level next. I have no interest in buying this market, and quite frankly don’t even have a scenario in which I’m willing to do so.
Natural Gas
Natural gas markets continue to bang around in the consolidation area that we have been in for some time, with the bottom of the range found out the $2.20 level, and the top of the range found above at the $2.40 level. With this being the case, it appears that only short-term trading can be done, at least for now.
If we can break above the $2.40 level, we then have to contend with the next massive area of interest which extends all the way to the $2.60 level. It is not until we get above there that I feel it’s safe to buy and hold, and quite frankly I am much more interested in selling if we get the opportunity below the $2.25 handle, if not the $2.20 level. Below there, the market could accelerate to the downside quite rapidly, and I would be very aggressive in shorting. After all, there is a massive amount of supply that still has to be worked through.
