The DTI Crude Oil market had a strong showing on Monday, breaking slightly above the $98.00 level. However, we are starting to head into significant resistance, and as a result I think that we could see a bit of a pullback coming. Although this market is slowly grinding higher, I do believe that there comes a breaking point which should be somewhere along the lines of the $100.00 level. This is simply because the demand for oil isn't pair, and as a result there comes a point where he gets to be far too expensive.
On top of that, the US dollar continues to strengthen overall, and this of course can have a negative effect on the value of commodities such as crude oil. Because of this, I think that the best trade in this market is probably going to be waiting for resistive candle to sell. It isn't until we close well above the $100.00 level that I feel comfortable buying this contract as it would show a massive break of an important resistance level.
Being patient is crucial
Being patient is going to be crucial to being profitable in this market. This is simply because the market has been so choppy over the last several months that if you cannot wait for the resistance level to be reached in order to sell, or the support level to be reached in order to start buying, you're going to find yourself in a lot of trouble. Looking at this chart, I think it's fairly obvious that somewhere between 98 and $100 there is a significant amount of resistance. I also believe that there is a significant amount of support somewhere around $92, and as a result those are the metrics that I am measuring this market by.
Going forward, I believe this is a short-term traders market at best. As far as hanging on anything it's going to be almost impossible for any length of time, and as a result I believe that this summer we will continue to see choppy trading conditions in this market.