WTI Crude Oil

The WTI Crude Oil market initially fell during the course of the session on Thursday, but found enough support just below to turn things back around and form a bit of a hammer. This tells us that the market could very well rally from here, and I believe a break above the $38 level probably sends this market to the $40 handle next. However, once we break above the $40 level US shale producers will more than likely get involved as they are very comfortable locking in that type of price for delivery. Ultimately, this should put a bit of a damper on any rally, so while I do think we go higher it’s probably going to make more sense to look for a selling opportunity, something that we are not to get anytime soon.

Natural Gas

The natural gas markets continued on Thursday to show signs of support, as the market looks like it’s ready to continue trying to go higher. Quite frankly I like that, because gives me an opportunity to sell this market from higher levels. An exhaustive candle above should be an excellent selling opportunity, and with that being the case I feel that’s what we need to see to get involved. I would not hesitate to start selling this market again, because there is far too much in the way of supply out there, I do not believe that this market can rally for any significant amount of time. With that in mind, I’m looking for selling opportunities going forward. I also believe that we will eventually make a fresh, new low, although it may take a while to get down to those levels.

I have no scenario in which I’m willing to buying the natural gas market, simply because there just isn’t any reason to think that we are going to see significant strength anytime soon. Given enough time, you can continue to sell this market again and again.