The WTI Crude Oil market rallied during a big part of the day, but found the $98.00 level far too resistive. Because of this, we formed a shooting star, and now I believe that we will attempt to continue the consolidation that we've seen for so long now. Although this consolidation area has been sloppy, it has been somewhat consistent in the sense that $92.00 has been basically as low as the market will go, while the market certainly won't take out the $100.00 level, with $98.00 being a significant barrier to even attempt it.
I believe that we could be seeing the summer trading action play now before our very eyes already. After all, it is vacation season, and most traders simply can't be bothered to be at their desks. A lot of times this market is very difficult to trade for anything more than a short-term scalp during the summer months, even though there is more demand as it is considered to be "driving season" in North America.
Until we break out, we will have to be very careful.
All trades as far as I'm concerned are only going to be for a dollar or two over the next couple of weeks, if not months. If we did somehow manage to break above the $100.00 level however, I would have to be very bullish of this market and hang onto a longer-term trade. However, I do not think that's going to happen anytime soon based upon the price action that I have seen over and over. On the other hand, if we managed to break the bottom of the shooting star from the Friday session, I think that it's a nice selling opportunity down to about the $94.00 level.
It really isn't until we get below the $90.00 level that I feel that selling this market for anything more than a short-term trade is possible. Whether or not that could happen might be different story, as it seems to be that the US dollar is probably the biggest driver of this contract at the moment. As the US dollar gains in strength, oil typically will fall.