WTI Crude Oil
The WTI Crude Oil market initially fell on Friday but found enough support at the $72 level to turn around and form a hammer. The hammer suggests to me that there is plenty of support below at the $72 level, as it was resistance previously. I think that the market may go sideways for a moment, before breaking above the $75 level. We have got ahead of ourselves in the short term, and little bit of grinding would make sense. Beyond that, we may also have buyers underneath so if we pull back from there, it’s likely that we would find plenty of value hunters underneath as well. I think that the market will continue to be noisy, but more than likely continue to find buyers and once we can clear the $75 level on a daily close, the $77.50 level above is the target at that point.
Natural Gas
Natural gas markets have fallen early on Monday, as we continue to see a lot of negativity in this marketplace, based upon not only oversupply but also much more mild temperatures. Beyond that, the 50 EMA is offering technical resistance as well, so it’s likely that we should continue to go down to the $2.80 level, and then eventually the $2.70 level. I think rallies are to be sold as we have seen over the last several sessions, with the $2.90 offering a particularly stringent amount of resistance. I have no interest in trying to buy this market, I believe that we are turning the corner and going lower from here. That’s not to say that it’s going to be some type of meltdown, but certainly there should be a negative grind.
