WTI Crude Oil

The WTI Crude Oil market broke above the $34 level during the course of the session on Friday, and then turned back around to form a massive shooting star. The shooting star of course looks very negative in general, so if we can break down below the bottom of the shooting star, it looks like the market should drop down to the $28 handle.

This of course was the consolidation area that the market has been in for some time, so it looks as if the sellers will have to come back into the marketplace to continue what we’ve seen for some time. This is a market that’s going to remain very negative, because quite frankly there’s so much in the way of supply in comparison to the very soft demand, so with that I have no scenario in which I’m willing to buy this market.

Natural Gas

Natural gas markets went back and forth during the day on Friday, but turned back around form a bit of a hammer. This suggests to me that perhaps we will get a little bit of a bounce but this bounce will be sold. I’m just waiting to see exhaustion above to take advantage of what is a very obvious and long-term downtrend, or a break down to a fresh, new low at the $1.70 handle. There is no scenario that I’m willing to buy this commodity because even though the WTI market is bearish and oversupplied, it pales in comparison to this market. It is going to be a long time before we can consider buying natural gas for any significant amount of distance.

In fact, I don’t even have a scenario at this point where I would consider doing that. It is simply sell, sell, sell, and sell again. This market is going lower.