WTI Crude Oil
The WTI Crude Oil market went back and forth during trading on Wednesday, as we continue to bounce from the uptrend line that you see on the chart. The market tends to be very sensitive to this area, and I think that the $60 level is now essentially the most important level to pay attention to. If we can break down below that level, and more importantly the uptrend line, the market probably roles over to the $58 level, and then perhaps even lower than that. Ultimately, I think that if we rally from here, then the $62 level would be the first major barrier to get beyond. I anticipate that this market will continue to be very noisy, but at this point it certainly looks very negative in general. However, if we were to break out above the $63 level, I think that this becomes a longer-term “buy-and-hold” situation again.
Natural Gas
Natural gas markets fell significantly on Wednesday, after forming a shooting star on Tuesday. The market has rolled over towards the $2.72 level, but then bounced a bit too show signs of life. The market should continue to be noisy, but I think given enough time we will eventually see sellers come into this market and break things down towards the $2.60 level. However, if we were to break above the $2.82 level, then the market probably tries to reach towards the $2.90 level. I am bearish of natural gas longer-term and believe that the $3.00 level will end up being a massive barrier as well. Ultimately, I think that rallies are to be sold, but I do recognize that if we break out above the $3.00 level, we could go much higher. With the longer-term oversupply issue, I think it’s only a matter of time before sellers get involved.
