On analysis of the movements of WTI Crude Oil futures since the announcement of bullish inventory, I find the upward moves look too steady to maintain its continuity, but the upward moves of Natural Gas futures headed for same thrusting upward move at the same time. I find the impact of trade war optimism looks evident enough to turn these two variables of energy sector, despite of a long historical inverse relation; to enforce them to have positive relationship from now onward. Let’s have look at the movements of these two variables of energy sector in different time frames.
Natural Gas – WTI Futures 15 Minutes Chart – Changing Directional Correlation
Natural Gas – WTI Futures 1 Hr. Chart – Changing Directional Correlation
Natural Gas – WTI Futures 4 Hr. Chart – Changing Directional Correlation
Natural Gas – WTI Futures Daily Chart – Changing Directional Correlation
On analysis of the movement of both variables of energy sector looks to be heading on an uptrend voyage. May it be impact of trade war optimism or May it be the bullish inventory of both variables – one has just witnessed and the other going to see on Thursdays. The need of the hour is to keep a vigil eye over this surprising change in inverse relationship. How long this inverse relationship sustain, will be indeed a new development in the field of energy futures correlation. Normally, if two variables show a negative correlation, there might be several other variables that, while not included in the correlation study, do in fact influence the variable in question. Even though two variables have a very strong inverse correlation, this result never implies a cause and effect relationship between the two. But, if they start to follow the same directional move, there might be explosive moves. I will soon present my findings over this changing directional behavior of WTI and Natural Gas futures. To Watch my upcoming in-depth analysis on this subject, suscribe my youtube channel ‘ss analysis’
1. This content is for information and educational purposes only and should not be considered as an investment advice or an investment recommendation. Past performance is not an indication of future results. All trading carries risk. Only risk capital be involved which you are prepared to lose.
2. Remember, YOU push the buy button and the sell button. Investors are always reminded that before making any investment, you should do your own proper due diligence on any name directly or indirectly mentioned in this article. Investors should also consider seeking advice from an investment and/or tax professional before making any investment decisions. Any material in this article should be considered general information, and not relied on as a formal investment recommendation.