WTI Crude Oil
The WTI Crude Oil market exploded to the upside, breaking above the top of the previous sessions hammer. This of course is a very bullish sign and could extend to a much bigger run. However, I think we are starting to run into a significant amount of resistance near the $46 level, and of course the previous uptrend line. I believe that the area will cause quite a bit of resistance, so some type of exhaustive candle would be an excellent selling opportunity as far as I can see. This has been a very bullish candle though, see you have to keep in mind that we could see a little bit of continued momentum to the upside. I have no interest in buying this market as the Crude Oil Inventories number comes out today.
Natural Gas
The natural gas markets initially tried to rally during the course of the session on Tuesday but found the area above the $2.75 level to be far too resistive. Because of this, the market ended up forming a massive shooting star and it looks as if we are going to drop from here and reach towards the $2.55 level. At this point, I believe that the $2.50 level below is the next major support area, and it might take several attempts to break down below there. However, the market has been selling off with quite a bit of ferocity lately, so I think it makes a lot of sense that we continue to see sellers into this market every time we try to rally on short-term charts.
I believe that the oversupply will continue, and of course the strengthening US dollar works against the value of a currency as well. This is a market that looks extraordinarily negative, and with that it’s likely that we will continue to see sellers return again and again.
