WTI Crude Oil
The WTI Crude Oil market bounced off of the uptrend line that I had discussed yesterday, and the $50 level. Because of this, it looks as if the buyers are still hanging about trying to push the market higher. I think that it’s only a matter of time before we reach towards the $52 level again, but I still maintain that if we break down below the $50 level and more importantly the trend line on a daily close that we will continue to go lower. This is essentially a “to wait trade”, meaning that I am a buyer initially, but if we turned back around us or breaking below that trend line, I will not hesitate to switch gears and start shorting.
Natural Gas
Natural gas markets fell initially during the day but found enough support at the $3.50 level to turn things around and show a very bullish candle. It appears the natural gas markets are not quite ready to give up the parabolic move, and as a result it seems like we are becoming more and more dangerous with each pullback. This is because sooner or later there won’t be support, and the collapse could be rather quick. Having said that, if we do see some type of support on a pullback near a large, round, psychologically significant number such as $3.50, you have to think there’s at least a decent chance of a bounce.
I still maintain that the buyers are going to continue to push this market on pullbacks, but I also maintain that we have not had a significant enough pullback for it to truly matter yet. I think the market is so far ahead of itself right now that we are starting to get dangerous, and with that being the case I continue to be very skeptical. I obviously cannot short this market, we have not gotten a decent signal yet, but I certainly don’t feel comfortable buying. Sometimes, you have to let the market do what it will.
