The WTI Crude Oil markets fell initially during the session on Wednesday, but as you can see just below the $106 level we found support and bounced enough to form a hammer. This of course shows the market wants to go higher, and perhaps try to break above the $109 level again. That area has been rather resistive, and I would have to believe that the $110 level just above should be as well just based upon the large round psychological significance of the number alone.
That being said, I have been saying for some time that the Federal Reserve and whether or not it's going to taper off of quantitative easing is more than likely one of the biggest factors move in the market. However, during the session on Wednesday, Egyptian troops killed over 200 people that were protesting the ouster of Pres. Morsi. This of course has the markets concerned about the free flow of oil from the Middle East, and as a result it did put a little bit of a bid in the oil markets, especially in the Brent markets.
Looks like were going higher
It looks like were going higher sooner or later. Quite frankly, the Federal Reserve and its quantitative easing program could be exactly what pushes the market higher as the US dollar loses value. On the other hand, the fed could surprise everybody and in fact taper off which of course will drive the Dollar higher, which of course would drive commodities on the whole lower. This market would be the same, but be aware of the fact that headlines coming out of the Middle East will certainly put a bit under the market for the short term. If we get above the $110 level, you could expect a massive breakout towards the $115 level relatively quick.
I don't really have any interest in selling this market at the moment, as it will be the Federal Reserve that more than likely pushes prices down if anything at all does. We are a couple weeks away from seeing that decision, so right now it's more or less a one-way trade.