WTI Crude Oil
With today being the Crude Oil Inventories announcement in the United States, likely that we will see a significant amount of volatility. We had initially fallen on Tuesday, but turned around to form a bit of a hammer. A break above the top of the candle for the day should send this market looking for the $59 level, and then possibly the $60 level if the inventory number is bullish enough. At the same time, there are concerns as to whether OPEC will be able to extend a production cut deal, and if they cannot, that could be a very negative headline event in this market. We have the potential for a “one-two punch” today, but we will have to wait and see which direction it leads us. On the upside, I suspect that the $60 level is resistance, just as I suspect that the $55 level underneath as support.
Natural Gas
Natural gas markets continue to be extraordinarily volatile, and the lack of volume has plagued available lately. We gapped higher at the open on Tuesday, as it looks like were tempted may be coming to the United States. However, these rallies are very short-lived most of the time, and I suspect that we will get an exhaustive candle to start selling. We have already gone too far after the gap to jump in now, as it would be “chasing the trade.” I can think of nothing that does more to record traders account than to chase the trade. If we get an exhaustive candle, I suspect that the market will probably roll over and try to fill the gap, meaning that we would go much lower. At this point, I’m sitting on the sidelines and waiting for clarity.
