WTI Crude Oil
The WTI Crude Oil market initially went sideways during the trading session on Wednesday, drifting slightly lower. However, the market rallied significantly as the US dollar sold off. The inventory number of the United States was less bearish than originally anticipated, so we got a nice pop in this market. However, I suspect it is only a matter of time before the sellers get involved, especially near the $62 level as it is in line with the uptrend line that had lifted the market higher. I believe that at the first signs of exhaustion, sellers will probably jump in. The stochastic oscillator is in the oversold area on the one-hour chart, so it’s likely that we will continue to see resistance and a potential selling opportunity. This will be especially true if the US dollar gains a bit of strength today, which in my estimation it could as it was oversold during the day.
Natural Gas
Natural Gas markets were choppy on sideways trading for Wednesday. It looks as if the $2.65 level is trying to offer support, and I think it’s likely that we could see a bit of a bounce. However, this bounce should be a selling opportunity, as the market is most decidedly bearish. I think that the overall attitude of the natural gas markets will continue to be very negative, because quite frankly it is oversupplied, and we are exiting the most bullish time of the year. I think that eventually the rally will attract short-sellers, as demand is dropping for natural gas, especially considering that temperatures in the northeastern part of the United States are starting to climb again. I believe that the $3.00 level above is essentially a “ceiling” in the market, so the higher we climbed, the more interested I am in shorting.
