WTI Crude Oil
The WTI Crude Oil market touched the 20 SMA on the daily chart, and perhaps more importantly, the uptrend line that had previously offered so much support. This is a classical retest of previous support, and now I think this market is ready to start rolling over. On a break below the $61.50 level, I think we go grinding lower, perhaps as low as $58 relatively soon. A breakdown below there could send oil markets stumbling even further, and at this point in time I do expect to see that eventually. The alternate scenario being that we make a fresh, new high above the $66 level, at that point I would have to be a buyer. Having said that, I believe that the oversupply of crude oil will continue to be a major issue.
Natural Gas
Natural gas markets rallied during the day on Tuesday, as traders started to take profits at the $2.60 level. Volume is anemic, so this tells me that this is probably more short covering than anything else. At this point, I want to sell this market that I certainly wouldn’t do so at these very low levels, and especially not after seeing such a massive selloff. I’ve been saying this for days, we need some type of rally to start selling. I believe that the $2.50 level underneath is a hard floor in the market, so break down below there could open the floodgates. In the meantime, you’re probably better off just staying away from this market in less you wish to scout the market on short-term charts and a range bound fashion between the $2.61 level on the bottom, and the $2.70 level on the top.
