Today has been a highly volatile day in all commodities markets. Russia has announced that they will not be attending the OPEC meeting, and Iran has requested another delay. This has created swings in both Oil and Natural Gas that have been hard to predict with any fundamental analysis.
During the swings today I adopted a new momentum study called RSI that I covered in the previous post. This has increased my understanding during some of the sharper downturns, and for much of the day it really did seem to be accurate. All of the sharpest downturns turned out to just be temporary, with large corrections occurring within an hour.
It remains a bad time to take any positions in oil or natural gas – Russia backing out is a particularly bad sign that there is much more downside potential than investors are willing to admit. In that vein, I have used my new indicator to identify what I believe to be an oversold condition in GE, which given the high volume and small movements in that asset should corrected by the end of the week.