WTI Crude Oil
The WTI Crude Oil market rose during the course of the day on Wednesday, testing the $35 level. However, there is a lot of noise just above so it’s very likely that this market will eventually find resistance strong enough to turn it back around. In the meantime, it looks like short-term traders will continue to push this particular market higher. For myself, I am simply waiting for a longer-term opportunity to short off this market that is very much in a downtrend. I do not believe in the uptrend until we break well above the $40 level.
The reason that I believe that the $40 level is going to be almost impossible to break above for any real length of time is that US shale oil producers will become very aggressive at the $40 a barrel level, and that of course will continue to push the value of the market down.
Natural Gas
Natural gas markets continue to get beat up as they fell significantly during the course of the day on Wednesday to make a fresh, new low. With this, it’s more than likely going to be a market that you can sell every time we rally, and show the very first signs of resistance. The market will more than likely try to reach down to the $1.50 level next, and it will take quite a bit to change the trend at this point in time. Quite frankly, this reminds me a lot of the gold markets in the 80s, when there was a time of money to be made selling the market every time it rallies.
Ultimately, short-term rallies that show signs of exhaustion are selling opportunities as they have been for several months. There’s nothing out there that could turn this market around at this point, as the supply is simply far too strong for any demand out there.
