WTI Crude Oil
The WTI Crude Oil market has been very noisy during the trading session on Tuesday, going back and forth, but it appears that the $66 level is going to offer support enough to turn things around and cause a bit of a bounce. I believe that the market is starting to show signs of life again, as the daily candle looks a bit like a hammer. A break above the top of the range for the day should send the market towards the $60 level. Alternately, if we break down below the bottom of the hammer, that’s a very negative sign and I think we would reset and try to go down towards the uptrend line underneath. I believe that eventually, the market will rally again as there are tensions in the Middle East that will continue to keep this market afloat.
Natural gas markets did very similar things during the day, pulling back but then bouncing to form a bit of a hammer. The difference here of course is that the longer-term attitude of natural gas is negative, and I believe that we will see sellers come back into this market eventually. The hammer is preceded by a shooting star, which of course is a negative sign. I think that eventually we will get sellers back into this market, with the $2.80 level being resistance. If we can break above there, then the market could find sellers near the $3.00 level. Ultimately, this is a market that I think gives us an opportunity to short every time we show signs of exhaustion. So far it has worked multiple times, and I think that is going to continue to be the case.