The WTI Crude Oil markets had a very strong showing during the Wednesday session, although it was shortened trading hours due to the US independence holiday for the fourth. This being the case, the market did manage to gap higher, and then continue above the $102.00 level. However, most of this is due to fears coming out of Egypt and whether or not the Suez Canal will be close, which of course is ridiculous.
Any super spike that we would see from a move to close on the Suez Canal, would certainly be turned around quite rapidly by the deployment of the U.S. Navy to open it back up. On top of that, the Egyptian military has taken over, and as a result a sense of stability should be coming back into the markets when traders come back online.
The candle is a shooting star, and as a result it does look resistive at this point in time. I quite frankly think that this reaction has been a bit exaggerated as per usual, and every time there is trouble in Egypt, all of a the sudden markets go much higher, only to come back to reality a few short days later. Quite frankly, with the decimated tourism markets in Egypt, the Egyptians simply cannot afford to lose the money coming in from the Suez Canal.
This overreaction looks to be a decent selling opportunity.
This market certainly has overreacted, and as a result I think it's only a matter time we get a nice selling opportunity. This candle actually is a significant shooting star, and as a fact I could actually see selling this candle by itself. That being said, you also have to realize that the US Dollar continues to strengthen overall, although it did selloff a bit during the Wednesday session. With a Dollar that is continuing to gain in strength, it will take less of those to buy barrels of oil. This of course should lead to lower prices overall. I believe it is only a matter of time before we continue south from here.