WTI Crude Oil
The WTI Crude Oil market initially tried to rally during the day on Tuesday but gave back much of the gains. By doing so, we ended up forming a bit of a shooting star, and I think that it shows that we could probably pull back a bit. The uptrend line that I have marked on the chart should continue to offer plenty of support, but I think that the pullback in the short term is going to end up being a buying opportunity more than anything else. However, if we break down below the uptrend line, essentially the $65 level, then the market could break down from here. Otherwise, if we break above the top of the shooting star, then we probably go looking towards the 50 EMA on the daily chart, which is closer to the $68 level. There are a lot of moving pieces in the oil market, and I think that explains why we have so much in the way of choppiness over the last several sessions.
Natural Gas
Natural gas markets have gone back and forth during the trading session on Tuesday, in a very volatile move. We initially tried to reach towards the $2.96 dollars level, but then turned around to fall towards the $2.90 level. I believe that the market continues to be very noisy, but ultimately I feel it’s only a matter of time before we break down because of the oversupply. As you can see on the chart, I have two thick red lines marked on the chart, as the potential outer boundaries of the overall consolidation. I think there is a massive amount of support above, and of course there is the psychologically important three dollars level as well. I think it’s only a matter of time before the sellers come back in somewhere between here and there, so rallies are to be sold. The $2.85 level underneath should be thought of as the next target. I don’t have any interest buying this market right now.
