WTI Crude Oil
The WTI Crude Oil market initially fell on Tuesday but found the area below the $48 level to be supportive enough to turn things around. We broke higher, and closed towards the very top of the range for the day which of course is a bullish sign in and of itself. With this, the market appears to be looking to build up enough momentum to break above the $50 level, which has been resistive so far. This was an area that caused the market to start falling back in October, so if we can break above it, we could see a significant move higher. In the meantime, I believe that the market is simply going to pull back on short-term charts in order to attract short-term buyers. Eventually, we could break out but I think it’s going to take several attempts. Short-term trading will lead the way.
Natural Gas
Natural gas markets initially tried to rally during the day on Tuesday but ended up falling significantly. In fact, we closed below the $2.00 level, which of course is a very bearish sign in my estimation. The fact that we broke down below the bottom of the shooting star from the session on Monday is also reason enough to think that we will start selling, and a move below the hammer from last week would be an even more bearish signal.
There is a reasonable expectation of support at the $1.90 level, which is previously supportive. I think that we will get below there, but we may have to bounce off of it first. Once we get below the $1.90 level, and looks to me that the next target will be the $1.80 level and so on. Eventually, I think we will reach the $1.60 level again, which of course was the recent massive low. I have no interest in buying, and believe that any rally should be looked at with suspicion.
