WTI Crude Oil
The WTI Crude Oil market has bounced off the major trendline that I have marked on the daily chart. This is a good sign, and it’s the first time we seen real constructive trading in this market over the last couple of weeks. Perhaps we have finally gotten to a point where there is enough value the buyers will return. I like the idea of buying herein aiming for the $69.50 level on a break above the top of the Friday candle. Otherwise, if we break down below the uptrend line and the $65 level, then I think this market breaks down rather significantly. That would have me targeting the $62.50 level, which would wipe out the move higher. If we can break above the $70 level, the longer-term trend would be confirmed yet again.
Natural Gas
Natural gas markets broke below the $3.20 level but turned around of form a massive hammer. Because of this, I think we stay within the overall consolidation that we see just above that level, with the top of it being near the $3.40 level. If we break below the bottom of the hammer for the Friday session, that would be a very negative sign, as it would show that the market was reentering the previous consolidation area. At this point though, it looks like simple back-and-forth trading will continue to be the way forward, as natural gas is in a seasonally bullish time of year, but obviously we have a lot of conflicting concerns, not only the strength of the US dollar but potential demand as well. Not only is there concern about the economy suddenly, but there is also the possibility of an “El Niño” hitting the United States this winter, keeping temperatures warmer than usual.
