WTI Crude Oil

The WTI Crude Oil market broke down during the day on Tuesday, slicing below the $65 level, and the uptrend line that has been keeping this market higher for some time. Because of this, we are approaching the 20 SMA, which should be somewhat supportive, and of course, the $63 level underneath their which has already proven itself to be support. I anticipate that we should have a buying opportunity present itself rather soon, but if we were to break down below $63, I think we would then go looking for support below at the $60 handle. Below $60, I would be a seller, but in the meantime, I think this will end up showing itself as a buying opportunity for longer-term investors.

Natural Gas

Natural gas markets continue to climb rather rapidly looking at the longer-term charts, but we continue to see the $3.50 level offer a lot of resistance. Because of this, I think that buying at this point is essentially “chasing the trade, even though it’s obvious that the buyers are not ready to relax. I much more comfortable going with the longer-term attitude of the market, meaning that we are at the top of the acceptable range. I believe that you are probably better served by sitting on the sidelines and waiting for the negativity to return, as we are entering the very end of the bullish season for natural gas.

One influential factor recently has been the falling US dollar, and of course the strengthening US economy. This would bode well for potential demand, or at least valuations, but at the end of the day the oversupply eventually comes back into play, giving an opportunity for the sellers. Natural gas markets remain very thin, and volume hasn’t exactly been impressive. It is because of this I think it’s still a wise idea to step away.