WTI Crude Oil
The WTI Crude Oil market had a slightly positive session on Wednesday, getting roughly 1% as I record this. At this point, I think that the market is oversold so a bounce from here makes a certain amount of sense. I believe that the $70 level above will offer a significant amount of supply, and of course psychological resistance due to the large come around, psychologically important number. I believe that the uptrend line underneath is supportive as well, and if we were to break down below there we would then test the 200 EMA. At this point, I think that we will have value hunters coming into this market for a short-term rally. Longer-term, we have a lot of things to work through, especially a stronger than usual US dollar.
Natural Gas
Natural gas markets tried to rally during the day on Wednesday but then turned around to form a negative candle yet again. It looks as if the $2.75 dollars level is going to offer short-term supply, but even if we break above there I think the $2.80 level is also going to offer problems. I suspect that this market goes looking towards the $2.70 level underneath, and then possibly the $2.60 level after that. In fact, I do not believe that rallies are to be trusted, and I think that the $2.85 level is essentially the “ceiling” in the market.
I believe that the $2.60 level underneath will be a very strong support level though, and I would be a bit surprised to see us break down below here. However, I certainly believe that the market will be targeting this level.
