WTI Crude Oil
The WTI Crude Oil markets tried to break out against the $44 level, but found far too much in the way of resistance above there. I am still a bit hesitant to start selling as I recognize that there is quite a bit of support below, especially near the $42 handle.
With the hammer that formed several days ago, I believe that the $40 level has become extraordinarily important in this market, and as a result it’s not until we get well below there that I would be willing to start selling. I would also demand a daily candle in order to do so. So having said that, I think that a lot of short-term traders will continue to jump into this market and by on signs of support, but I don’t know how many people have enough conviction to simply stay in this particular type of environment.
The natural gas markets initially tried to rally during the day on Thursday, but turned back around to form a shooting star. This is exactly what happened on Wednesday, and as such it looks as if the market is going to roll over. I believe that this market will eventually break back down below the $2 level, and reach towards the $1.90 level. I believe that we will also break down below there given enough time, and that although we have seen a decent rally, the reality is that a lot of it is based upon what’s going on in the WTI Crude Oil market, which typically will move in tandem with this market over time. However, the dynamics have changed and as there is a monumental oversupply and natural gas, I believe that correlation may be all but dad for the longer term. With this, I continue to sell this market on a break down below the bottom of the range for the Thursday trading session.
This analysis is collected from dailyforex.com