WTI Crude Oil
The WTI Crude Oil market rose during the course of the day on Tuesday, breaking back above the $46 level. While we have reentered the previous descending triangle, you could make an argument for down trending channel now. Because of this, I still see the negativity in this market and of course we get the Crude Oil Inventories announcement coming out of the United States today. With this, it’s very likely that we will see some type of reaction to the market, and then it makes quite a bit sense that part of the reason that we rose during the day on Tuesday is that perhaps people are trying to step away from short positions in case of a surprise announcement. Nonetheless, I do believe that we continue to go lower, and right now I’m looking for a move to the $43 level. It’s not until we break above the $50 level that I feel that you can serve buying again.
Natural Gas
Natural gas markets bounced off of the $2.70 level, an area that has been supportive in the past. However, I don’t necessarily think that the market is ready to explode to the upside, I think we are simply ready to grind sideways for a moment as we try to catch our breath after a very extensive move to the upside. Furthermore, if we continue to see a grind sideways, it could very well be the market trying to build up enough momentum to break out above the $3 level finally.
On the other hand, if we can break down below the $2.50 level, I feel that the market should grind much lower at that point in time and perhaps reach towards the $2.00 level. This is a market that still sees quite a bit of bullish pressure, but at this point in time I have to be the first person to acknowledge that longer-term the natural gas markets will see bearishness.
