WTI Crude Oil
The WTI Crude Oil market fell right off the bat during trading on Thursday but found enough support near the $67.50 level to turn around of form a hammer. This suggests that there is still plenty of buying pressure underneath, and that we may continue to try to break out to the upside. At this point, I believe that this market is one that should be bought on pullbacks and dips, as they should represent value. This will be especially true if the US dollar loses value, which of course is a bit of a mixed bag. However, oil can rally right along with the greenback, so don’t let that be the only reason you take the trade. If we clear the $68 level decidedly, we will probably see this market rally towards the $69 level, and a break above there opens the door to the $71 next. A break below the $67.50 level will have this market resetting at lower levels.
Natural Gas
Natural gas markets just won’t let it go, they are trying as hard as they can to break higher and clear the $3.00 level. However, at this point we continue to sell off every time we get even remotely close to that level, so I think it’s going to take a lot of effort to make that happen. In general, I believe that this market continues to offer selling opportunities on signs of exhaustion, and as the Asian trade will be light, I suspect that the setup may be very early in the day. Ultimately, this is a market that I think will roll over and drop down to the $2.70 level, but it’s going to take a significant amount of time for that to happen.
