WTI Crude Oil
The WTI Crude Oil market rallied initially on Monday, but found the $50 level to be a bit too resistive. After the very bearish candle that formed on Friday, it looks very likely that we are going to continue to go lower. If we break down below the $49 level, then I think the market is ready to go to the $47.50 level underneath, and then eventually the $46 level. Alternately, if we break above the $50 level, I think that the market could go to the $51 handle, and then the $52.50 level. This is a market that will continue to be very choppy overall, as there are a lot of concerns when it comes to OPEC pricing and then of course the oversupply of crude oil. Ultimately, I think that the market will start to sell off again, but clearly there is a lot of chopping to do in the short term.
Natural Gas
Natural gas markets initially tried to rally during the day on Monday, but found the area above the $2.85 level to be far too resistive to continue to go higher. We ended up forming a bit of a shooting star at the bottom of a downtrend, and that normally means that we are going to continue to see selling pressure. I think that we will go down to the $2.75 level underneath, which has been massively supportive in the past. The market is obviously broken, and therefore I think that even if we do rally from here, it’s only a matter of time before we see exhaustive price action that we can start shorting. If we can break down below the $2.75 level, then I think we go down to the $2.50 level next.
