WTI Crude Oil
The WTI Crude Oil market initially rally during the trading session on Tuesday but turned around to form a shooting star. The shooting star of course is a negative sign, and I think at this point were going to continue to go back and forth in a tight range around the $62 level. On the daily chart, you can clearly see that we have broken through an uptrend line, come back to retest that level, and then has fallen again. If we break down below the $60 level, I think that will be the catalyst to send this market much lower. Over supply continues to be an issue, but right now I think at this point it’s likely that we will see more sideways action with a negative attitude than anything else. A breakdown below the $58 level allows this market to drop much further.
Natural Gas
Natural gas markets rallied during the trading session on Tuesday, breaking above the $2.75 level. The market rallying like this is good on several levels, not the least of which is that we have been oversold for some time, and I think eventually we will see the market try to rally as high as the $3.00 level. The natural gas markets have been oversupplied for some time, but recently we have seen a huge demand for natural gas coming out of the United States. I think that the market will short-term traders will see this breakout as an opportunity to start going long, but I recognize that it could be rather noisy between here and the 3.00 handle. Unless you are a short-term trader though, you will probably pay more attention to exhaustive daily candles to search shorting rather than trying to take the quick trade.
