The WTI Crude Oil markets fell rather drastically during the session on Thursday, as you can see closing below the $105 level. This market has been extraordinarily parabolic, and quite frankly I've been having trouble figuring out why. As I said several times over the last week or two, the Egyptians will absolutely do anything they can to keep the Suez Canal open. Without the canal, there is no Egyptian economy at this point. Tourism is completely dead in that country, which was the only other major source of income. At this point in time, very few Westerners are going to go see the pyramids at Giza.
Going forward, I had been looking for some type of drastic pullback to this parabolic market, and it's possible that we could be seeing the beginning of that. With that being said, I'm quite comfortable shorting this market just below the close of the day, simply because the potential move down to the $99 level is worth the risk being taken.
Watch the headlines, and learn to ignore them given enough time
When I hear the headlines coming out of the Middle East that spooked the markets, I actually look at it as a selling opportunity, but at higher levels. Quite frankly, nobody is hurting for oil at the moment, and the fact that this market fell hard on it dated solely US dollar get absolutely lambasted tells me that this market is completely out of sync with reality.
I believe that there will be a certain amount of support at the $103 region, but we will more than likely see that level overcome without too much difficulty. As far as buying this market is concerned, I have zero interest simply because there has been such movement in such a short time that it's almost impossible for me to justify taking the kind of risk that would be associated with "chasing the market." I fully expect to see the oil markets come back to reality soon, it's only a matter of when.