The WTI Crude markets had a very rough day on Tuesday, as the "risk off" trade came into play around the world. Because of this, the oil markets sold off rather drastically. This was true in all oil markets, not just the WTI crude market. Because of this, we got a pretty significant shock to the market, as the US dollar gained drastically against the Euro.
With that being said, it makes sense that the WTI contract would fall in value as it takes less of those US dollars to buy a barrel of oil. The move was rather significant, and because of that I am a bit hesitant to go long in this market now. I can see that the $94 level offered significant resistance, and it seems now that will be a significant hurdle going forward.
The market fell so far that it almost broke the bottom of the hammer that was printed on Monday, which would have been a truly negative sign. I still think eventually we will settle into some type of trading range, probably between the $90 and $96 levels, but the markets are too volatile at the moment to settle down in my opinion.
Unfortunately for the WTI traders, most of the action would have been dictated from the little Mediterranean city of Nicosia, as the entire world followed the action in the Cypriot Parliament. As the country of Cyprus has voted down the so-called "tax" that the troika wanted to enact on deposits in the Cypriot banks, there is a certain amount of uncertainty in the marketplace that of course has many of the traders out there nervous.
Because of this, I would suspect that this market should continue to be relatively choppy going forward, and as a result I believe it's best to step back and let the market settle down a bit before getting involved. Oil markets can be very brutal at times when they are in one of these choppy move, and the smart money typically will to stay on the sidelines. This is exactly what I intend on going over the next couple of days, and as a result will wait for some type of stable looking candle or a resolution to the problems in Cyprus before getting involved.