WTI Crude Oil
The WTI Crude Oil market initially fell during the day on Tuesday, but the inventories number came out much more bullish than expected and we of course turn right back around. Because of this, we took back most of the losses from the previous session, and it now looks as if we are going to continue to grind our way towards the $50 level. Pullbacks at this point in time still should see support near the $46 level, as I suggested yesterday. In other words, I think we’ve already seen the pullback and we are going to continue to see buyers step into this market, even though it is somewhat overbought.
Natural Gas
The natural gas markets initially fell during the course of the day on Tuesday, and then turn right back around form an extraordinarily bullish candle. We closed just below the $2.75 level, and as you can see that is an area that I have marked clearly on this chart. I would expect that we could see a bit of resistance here, but if we can get above the $2.75 level, we could then reach towards the $2.90 level. Pullbacks from here could be an attempt to build up momentum, as this impulsive candle is rather strong.
At this point in time, it’s probably best to step away until we get the daily close so that we can see where the real momentum is as far as direction. This is a market that is very choppy, but I do recognize that there is a lot of noise above that could turn the market back around and form a bit of a negative candle. I believe that the $2.50 level below is essentially the “floor” in this market, so having said that I believe that we have to make a fairly significant decision fairly soon, but volume is light at the moment.
