WTI Crude Oil
Oil markets rallied during the day on Tuesday after OPEC oil minister suggested that we should see close to 100% compliance to output production cuts. However, the $55 level has been rather resistive and you can see that we turned around to form a shooting star. This is a very negative sign and I think that the sellers are going to come back into the marketplace but we need to fill the gap first before we are free to go lower. I spent most of the day on Tuesday scalping to the downside in this market using the $55 level as a stop loss. I think we will continue to see negative pressure over the next several sessions. However, we break above the $55 level, expect a move towards the $57 level next.
Natural Gas
Natural gas markets fell rather significantly during the day as we sliced through the $2.75 level. The market should then reach towards the $2.50 level as we are starting to see bearish pressure continues to strengthen. Because of this, I believe that is only a matter of time before sellers get involved every time we rally, and I will look for short-term rallies on short-term charts in order to start selling yet again. The natural gas markets are in serious trouble as temperatures in the United States have heated up. Quite frankly, we are getting awfully late in the season to think that the demand is going to overtake the supply. There is a longer-term glut in supply, and that will continue to be the case for the foreseeable future. I am a seller, and have no interest in buying this market. The ferocity of the selloff during the day was rather impressive, and shows that we could start to see even more pressure applied to the natural gas markets.
