WTI Crude Oil
The WTI Crude Oil market went back and forth during the course of the session on Tuesday, as they ended up forming a fairly neutral candle in this market. We are sitting on top of an uptrend line, and of course we get the Crude Oil Inventories number coming out of the United States today, and that will have a massive effect on the market. If we can break above the top of the range for the session on Tuesday, I feel that the WTI Crude Oil market will continue to go higher, perhaps reaching towards the $50 handle. On the other hand, if we break down below the bottom of the range during the course of the session on Tuesday, we could very well continue to go much lower from there, perhaps reaching towards the $43 handle.
Natural Gas
The natural gas market tried to rally initially during the day on Wednesday, but turned right back around at the $3 level as it is massively important to this market. We fell during the course of the day, and it now looks like we are going to continue to drop from here. I believe that the target is probably going to be $2.65 going forward, but the volatility of course has shaken a lot of players out of this market. With this being the case, as long as we stay below the $3 handle, I believe that you have to be short of this market, just as if we were to break back above the $3 level again, you would have to start thinking to go long again. Ultimately, this is a market that looks like it’s a bit overdone in both directions, so I think this is going to be a massively volatile market no matter what happens next, and as a result you may want to keep your position fairly small.
