WTI Crude Oil
The WTI Crude Oil market shot higher during the course of the day on Wednesday, mainly in reaction to the Federal Reserve talking about only having two interest-rate hikes during the course of the year as opposed to for as originally anticipated. This drove down the value the US dollar, and by extension oil rose. Because of this, it’s very likely that we will make a serious attempt to break out. However, I still believe that the shale producers will jump into the market heavily just above, so I don’t know how much of a rally we have ahead of us. We have to pay attention and see what happens with the US dollar, but right now I would actually prefer to be on the sidelines or perhaps sell an exhaustive candle just above.
Natural Gas
The natural gas markets initially fell but turned right back around during the course of the session as well. However, this is a market that I have absolutely no interest in buying, and I believe that the $2 level will be massively resistive. With this, I’m waiting to see some type of exhaustion that I could sell into, but I have not seen it yet. Ultimately, there is more than enough supply out there to keep the value of natural gas low, and of course we are entering warmer weather. True, US drillers have stopped at the moment to stop losing money, because it’s getting to the point where it isn’t even worth their time. However, the supply is still so strong that it’s hard to imagine this market rallying for any real significant amount of time.
Going forward, and fully anticipate revisiting the lows again, but we do not have the right candle to start selling yet. At this point, I still believe that the $2 level is essentially the “ceiling” in this market, and should continue to be.
