WTI Crude Oil
The WTI Crude Oil market initially tried to rally during the day on Wednesday, but found the $42 level be far too resistive to continue going higher. Ultimately, we ended up forming a shooting star which of course is one of my favorite negative candles to start shorting. If we get that move lower, I feel that we could very well find ourselves reaching down towards the $40 level, perhaps even as low as the $36 level. A lot of the rally has been based upon the idea that the April 17 meeting in Doha will produce some type of production freeze in order to bring down supply. At this point, I believe that we either have baked in all of the positivity of that possibility, or have set up for a massive disappointment if they don’t come together on an agreement. With this, I believe that we need to pull back, and we may even fall rather drastically.
Natural Gas
The natural gas markets rose during the course of the session on Wednesday, closing just above the $2 level. While this is slightly positive, at the end of the day I still feel that there is quite a bit of downward pressure. I think the pull back is coming, but we need to see the market drop below the $2.00 level and at that point in time could very well reach towards the $1.90 level. This is a market that should continue to be rather consolidative and of course has a lot of moving parts that are working against the value of the commodity, so at this point in time I’m waiting to see a good signal to start selling.
Being patient would be the way to go, and I am willing to sit on the sidelines and wait for the breakdown. I would also wait for an exhaustive candle if we get that, I have no interest whatsoever in buying this market as the supply is still far too strong for the demand.
