WTI Crude Oil
The WTI Crude Oil market went back and forth during the day on Friday, as the area above $46 ended up being just a bit too much for the buyers to overcome. With this, we ended up forming a bit of a shooting star, which of course shows quite a bit of bearish pressure. However, I think that if we break down below the bottom of the shooting star, market forces will probably drive this market lower, only to test support near the $44 handle. I have no interest in shorting this market, I believe that a pullback to that level only offers a buying opportunity. There is a lot of noise between here and the $50 handle, so expect choppy conditions nonetheless as we continue to weigh the value the US dollar against all of the supply and demand concerned.
Natural Gas
The natural gas markets initially tried to rally during the course of the session on Friday but found the $2.20 level to be a bit too resistive. The fact that we turned back around and pulled back shows that we are not quite ready to break out of this range, and with that the market could very well be choppy in the short-term. I think that as long as we continue to see this type of action, it is probably going to be more or less a short-term trader’s type of environment, and with that it’s very likely that the choppiness will continue to keep long-term traders away. I believe that it is probably only a matter of time before we make a significant move though, as we are trying to build up enough momentum to finally break up or break down. I believe in the longer-term downtrend though, so it is probably easier for me to short this market on exhaustive candle or break down below the $2 level as it would show a continuation of the downward pressure.
