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Crude Oil Price- August 27, 2013

The WTI Crude Oil markets fell during the session as you can see on Monday, but found enough support just below the $106 level to form a little bit of a hammer. I believe that this market will continue to consolidate overall through the rest of the summer, which is rapidly coming to an end. The biggest problem with the market right now is that there are too many people worried about what the Federal Reserve will do as far as quantitative easing during the month of September or October, and there is simply not enough in the way of market participation by the large traders out there in order to have normal movement.

That being said, it does look like we're going to consider continuing the consolidation that we've been in for what seems like ages now, but has essentially been the balance of the summer. The biggest problem that I have thinking that this market is going to go higher is simply that the $109 level has been so resistive, and on top of that you have the $110 level, which of course is an area that should have psychological significance based upon the fact that it is a big round number.

Below there, the 103 level has been supportive enough for me to be concerned as far as shorting is concerned going forward. In the meantime, I think that this is simply going to be a short-term traders market, and there will be no trading opportunities for anything more than the dollar or two at a time.

The Federal Reserve

Until the Federal Reserve makes its intentions known on quantitative easing, I don't think that this market is going to be able to breakout. The only other thing that could cause this market breakout higher is if the situation in Egypt gets worse, but right now the market seem to be focusing more on the Brent contract as far as that is concerned than anything else. Because of this, I fully expect to see short-term trading opportunities continuing, and no real opportunities happening until we get closer to the September Federal Reserve meeting.

Crude Oil

Christopher Lewis
About Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

 

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