WTI Crude Oil

The WTI Crude Oil market initially tried to rally during the session on Monday, but fell rather precipitously, breaking through the bottom of a hammer from the Friday session. That being the case, the market looks as if it is going to go down to the $47 level. A breakdown below there should send this market to the $45.50 level as well. This market seems to be rolling over as we have seen more than once, and I think that the downward channel may be continuing yet again. If we broke above the $50 level, that would of course be a very bullish sign and could turn everything around. Ultimately, I believe that the market should continue to be bearish and therefore I look at short-term rallies that show signs of exhaustion as a nice opportunity to start shorting again.

Natural Gas

The natural gas markets initially gapped higher at the open on Monday and then fell apart. Because of this, I think that the market is getting ready to fall, and a break below the bottom of the range for the day should send this market towards the $2.85 level underneath, and then perhaps the $2.75 level after that. I see a massive amount of resistance starting at the $3.00 level, extending to the $3.10 level above. Ultimately, this is a market that should continue to be bearish overall, and the oversupply of natural gas continues to be an issue. I don’t have any interest in buying, least not until we would break above the $3.10 level, and I don’t think that’s going to happen anytime soon. Because of this, I remain bearish and I think that we will revisit the lows over the next several sessions.