WTI Crude Oil
The WTI Crude Oil market initially tried to rally during the trading session on Tuesday, but have rolled over since then, forming a shooting star that sits on top of support. I think that the $63 level should be supportive, but if we break down below there, I think that the market will probably drop down to the $62 level next. Below there, I see an uptrend line that is crucial for the buyers to stay above to continue the uptrend. If we break down below the uptrend, then I think the market is probably going to start falling, perhaps as low as $56. Pay attention to the US dollar, it has is influence as well, but at this point I think that the market is still somewhat bullish, but may need to pull back to find value, just as the stock markets have done.
Natural Gas
Natural gas markets fell significantly during the day but found enough support at the $2.85 level to turn around and form a hammer. That is a very bullish sign, but at this point I think that this market bouncing is the first thing you want to see, so that you can start selling again. I have no interest in buying this market, and would love to see some type of bounce, perhaps as high as $3.15 to start shorting again. Markets have been sold off so stringently, that there’s really nobody left to sell at this point. I need to see exhaustion on a bounce to get involved in a market that certainly will be bearish. Volume has been very thin during the day, so it leads me to believe that we are seeing a situation that is probably going to lend itself to short covering.
