The WTI Crude Oil markets fell hard during the course of the session on Tuesday, slamming into the $91.00 level. With that being the case, the market looks as if it could be continue to fall a little bit here, but there is so much support at the $90.00 level that it could be difficult to continue going lower. After all, the level is not only solid lately, but it is also a large, round, psychologically significant number. With that, we would anticipate buyers to step been anyways, sensing a bit of value and the $90 handle.
Looking at the shape of this candle, you can see that we closed at the very lows of the session, which of course is a very negative sign. If we bounce from here, and more than likely will only represent an opportunity to sell this marketplace going forward, as the $95.00 level should offer resistance still. Besides, the trend is certainly to the downside, and that has not changed as you can tell.
US dollar strength
Looking at this market, one of the first thing that comes to mind is the fact that the US dollar continues to be strong. All one has to do is look at the US Dollar Index in order to see just how strong the greenback is at the moment, and with that being the case, it will continue to work against the value of oil and other commodities quite frankly. This is technically a “bearish engulfing candle”, which of course is a very negative sign. However, it’s not until we clear the $90 level on a daily close that I am comfortable selling for any real length of time.
On the other hand, if we bounce from here, I believe that a lot of short-term sellers will come back into the marketplace as they will sense a continuation of the trend. Ultimately, I believe that the market will end up being one that is going to be almost impossible to go long as the trend is so well entrenched.
