WTI Crude Oil
The WTI Crude Oil market rose slightly during the course of the session on Tuesday, testing the $44 level. The $44 level is of course an area where we have seen quite a bit of support in the past, so it should be relatively resistive. However, we also have to keep in mind that the Crude Oil Inventories number comes out of America during the day today, and that obviously has a massive amount of effect on this particular market. Ultimately, this is a market that will struggle to reach towards the $50 level, but very well could if present momentum continues. Nonetheless, it is a very difficult move to complete, so having said that we will more than likely have several pullbacks again and again going higher.
On the other hand, we could drop from here but we need to break down below the $42 level in order to reach the $40 handle, which of course is a massive round number. That being the case, the market should find buyers sooner or later, but the question remains as to when.
Natural Gas
The natural gas markets fell during the day, testing the $2 level yet again. This of course is a large number and therefore attracted a lot of attention. It was an area where we had quite a bit of resistance previously, and it makes sense that the area should now be supportive. If that’s the case, the fact that we formed a hammer is an overly surprising but we are still very volatile and therefore I do not like the idea of going long yet. I would prefer selling on a break down below the bottom of the hammer that formed for the day. After all, even though we are slightly above the $2 level, we are still very much bearish over the longer term, and as a result I feel it’s only a matter of time before the sellers come back and control things yet again.
