WTI Crude Oil
The WTI Crude Oil market went back and forth during the course of the day on Wednesday, using the $44 level house a magnet for price. Given enough time, we should get some type of volatility that tells us where to go next, and I believe that the $42 level below should continue to show quite a bit of support. In fact, I would anticipate that a drop from here should simply attract more buyers away this market has been going lately. However, I recognize that if we can break down below the $40 level, that would be very negative. I also recognize that there is a lot of noise just above, and that it’s going to take quite a bit of momentum to break out to the $50 handle. With this, there are a lot of movement inducing factors out there when it comes to the petroleum markets, so expect quite a bit of volatility.
Natural Gas
Natural gas markets rose during the day on Wednesday again, as we continue to bounce around in a consolidative tone. The $2.20 level above is massively resistive, as it is the top of the consolidation area that the market has been paying attention to. However, there is massive support down at the $2.00 level as well, so I think we are simply going to continue bouncing around. If I look at the short-term charts, I will eventually find an exhaustive candle that can be used to sell this market. Ultimately, this is a market that could break down, but it’s going to need to pick up more selling momentum in order to get involved.
Even though we have rallied quite significantly lately, the reality is that the overall trend is still to the downside. With this, I’m still bearish of this market overall but I do recognize that there is going to be trading opportunities in both directions.
