WTI Crude Oil
The WTI Crude Oil market rallied on Thursday, as we continue to see quite a bit of volatility in this market. I still believe that we are essentially consolidating, and thus I think that the $55 level above is resistance. The $51 level underneath is supportive, and in the meantime, I think we will go back and forth repeatedly. This market is asking itself a lot of questions, including whether there is an oversupply or helpful production cuts. I believe longer-term the oversupply is going to become an issue, but currently it appears that the market is willing to overlook that. And exhaustive candle above should be a selling opportunity though, but if we break above the $55 level on a daily close, then we should try to reach towards the $60 level which is even more resistive.
Natural Gas
The natural gas markets initially tried to rally during the day on Thursday, but found the $3.50 level to be massively resistive. That’s an area that will continue to be, mainly because it is the bottom of that massive gap from a couple of weeks ago, if we can break above there, then I think we will fill the gap, meaning that we will go to the $3.73 level. In the meantime, I believe that a time we show signs of exhaustion near that level, it’s probably time to start selling again. That should send this market down to the 3.25 level again, which is previous support. I believe we will probably break down below there again, but the one thing I think that will be a mainstay of this market is going to be the massive amount of volatility that we have seen. I have no interest in trying to hang on to the trade for too long now, but I do recognize a given enough time, natural gas markets will collapse as we reach into warmer temperatures in the United States, and of course oversupply takes the forefront again.
