The WTI market shot higher during the session on Tuesday, but did run the quite a bit of resistance at the $93.00 level. This is the epicenter of a cluster of noise going all the way to the $94.00 level, and as a result this doesn't surprise me that the market found it difficult to overcome. However, I do believe that eventually we will breakout as the Federal Reserve continues to send printers into overdrive. On top of that, you have to keep in mind that the major central banks around the world are doing the same thing, and this makes a lot of traders want to own "stuff", instead of paper currencies.
Looking this candle, it does suggest that perhaps it will be a fight to get over this resistance area. However, this would more than likely only mean a bit of choppiness in the short term. Ultimately, I believe that we find a nice range between $90.00 and $95.00 or so. If we do manage to break above the $95.00 level, I believe that the fight to get back to the $98.00 level will be very difficult.
One of the things that I love about the oil markets is that they tend to be so technical in nature. If we get this consolidation area that I believe is going to come, this means that it will be very predictable for some time. It is very common for this market to find a $5.00 trading range, or even a $10.00 one. It will quite often cause the market to bounce around in this general vicinity, and tends to be very predictable. Because of this, I have done quite well in this market over time.
I see far too much noise below the $90.00 level in order to think that we will break to the downside, barring some type of economic issue. That's not to say that we won't have one, because we certainly have had our fair share over the last couple of years. Ultimately though, I think we are going to settle into this range going into spring, and more importantly summer in the United States.