WTI Crude Oil
The WTI Crude Oil market rose rather drastically during the day on Monday, testing the $34 handle. However, this is an area that should be rather resistive so quite frankly we probably won’t see much of a break out here. I would be a seller on signs of exhaustion, and as a result I am essentially sitting on the sidelines right now waiting for that signal. It’s very likely that the market will continue to find sellers given enough time, and with that it’s likely that somewhere between here and the $40 level we should see a significant amount of selling pressure. The fact that we are in a downtrend keeps me on the downside with this market, sensibly waiting for a sell signal.
We honestly don’t have one yet, but quite frankly the idea of turning this market around seems to be far too aggressive to think it will happen anytime soon. The oil markets should continue to be very soft going forward.
Natural Gas
Natural gas markets fell a bit during the course of the day on Monday, but turned back around and form a hammer like candle. However, even though the hammer is a very positive candle, the reality is I think that any rally from here will be sold off. I like the idea of shorting natural gas again and again, because quite frankly the market simply cannot get out of its own way.
I think that there is a significant amount resistance at the $2 level as well, so somewhere near that area I would be willing to sell exhaustive candle and would love to get that type of movement to take advantage of the downtrend. However, I recognize that a break down below the bottom of the hammer would be just as good of a reason to start shorting as well as we have such a massive downtrend.
