WTI Crude Oil
The WTI Crude Oil market fell during the course of the session on Tuesday, testing the $36 level. If we can break below here, I feel that the market should then go down to the $34 level next, and then beyond that. The market as you can see struggled quite a bit at the $38 level previously, so I believe now we are ready to continue going lower. However, you have to keep in mind that the Crude Oil Inventories announcement comes out during the course of the session today, so that can have a drastic effect on how this market behaves. Nonetheless though, if we rally from here I’m simply going to look for exhaustive candles in order to start shorting again. In fact, I think that the US shale oil producers threatening to flood the market $40 will keep this commodity soft over the longer term.
Natural Gas
The natural gas markets initially tried to rally during the course of the session on Tuesday, testing the $1.90 level for resistance. It did find it there, and the market turned right back around to form a shooting star. We had previously formed a shooting star on Friday as well, so it more than likely means that eventually we will break down from here and continue to go lower.
A break down below the bottom of the candle for the Tuesday session should send this market lower, perhaps reaching back down to the $1.60 level over time. If we break above the top of the candle for the session on Tuesday, it’s likely that the market should then try to find a massive amount of resistance near the $2 handle. I think that will essentially be the “ceiling” in this market, and therefore I do not expect this market to go above there. I’m simply waiting for an opportunity to start selling again.
