The WTI Crude Oil market attempted to rally during the session on Tuesday, but as you can see the 96 points or zero dollars level offered far too much resistance. The resulting shooting star has changed my mind a bit about this market, I now believe that the sellers are starting to take control again. While I had initially thought that perhaps there was a small potentially lucrative trade to the upside, I now think that the strength of the US dollar will continue to plague the oil markets, and in a sense oil is "dead money" at the moment.
It doesn't really matter though, this market is far too choppy to get involved with. In fact, it's even difficult to find a trade on the longer-term weekly or even monthly chart. That being said, I believe that this market is still stuck in what will more than likely become its "summer range", and as a result I think that a break of the lows for the session on Tuesday is indeed a sell signal, but probably just for the short term.
When you look at this market, it's a lot like a Ping-Pong match - or table tennis depending on where you live. Because of this, you can see that the markets are simply chopping around in a relatively tight range, and as a result it is difficult to take on any position with any amount of conviction, let alone clarity. Because of this, I think that a break of the lows for the session on Tuesday is indeed a sell signal, but a short-term one at best. I fully expect the 92 points or zero dollars level to offer support going forward.
Because of this, this is not one of my favorite markets at the moment. In fact, I do not have a position on in this market currently, and probably won't anytime soon. That being the case, if you feel the need to trade energy, I would direct you to the natural gas markets which have been a little bit more clear than this particular market lately. On the other hand, if you are fully invested in the idea of trading the oil markets, you better have the ability to do it on the short time frame.