WTI Crude Oil
The WTI Crude Oil market rallied during the day on Wednesday, breaking out to the upside, clearing the $68 level. By making this fresh, new high, it looks like the market is going to continue to see buyers jumping in this market, and I believe that short-term pullbacks will be thought of as value. The market is more than likely going to go looking towards the $70 level above, which is a large, round, psychologically significant number that will bring in a certain amount of attention to itself. I believe that if we can stay above the uptrend line, which is something that looks very likely to happen, buying the dips is the only way to play this market, adding as we go along and trying to build up a sizable position to take advantage of the upward proclivity. If we can break above the $70 level, we probably go looking towards the $72 level next.
Natural gas markets continue to show a lot of volatility, forming a shooting star during the day on Wednesday. This market failed just below the $2.80 level, so my plan for this market is to look for short-term charts to show signs of exhaustion as we did on Wednesday. At signs of exhaustion near the $2.80 level, I’m more than willing to sell. Alternately, if we can break above the $2.80 level, it’s likely that we will go higher, perhaps to the $3.00 level where I expect to see even more resistance and even more selling pressure. With that in mind, I remain very negative, but I do recognize that the hammer on Tuesday suggests that we are going to be very choppy as there are obviously some buyers underneath.