The WTI Crude Oil markets fell fairly hard during the session on Wednesday, but remained above the truly significant support level in the form of the $100 range, which actually starts at $101. Because of this, I feel that this market is going to struggle fall from here, but in reality it does look relatively bearish. I am not selling until we close below the $100 level, so that being the case I'm actually looking for some type of bullish sign down here, perhaps a hammer or something of that ilk.
I believe that if we can get support down here, we will continue to bounce around between here and the $108 level, which would simply continue the consolidation that we've seen since the beginning of summer. Whether or not that happens of course is going to be a completely different question but I do feel that there is a high probability that if we get any bounce from here we will continue to do the back and forth that we've seen recently.
Watch the Federal Reserve
It really wouldn't surprise me if the Federal Reserve continues to drive the price of oil, albeit indirectly. The value of the US dollar continues to drive the price of oil in its own way, and as a result you will have to watch with the Federal Reserve does. After all, naming Janet Yellen as a potential successor to Ben Bernanke doesn't exactly instill some type of hawkish behavior in the minds of traders, so therefore it's very likely that oil will continue to have a bit of a bid over the long-term.
You of course have to balance that with the idea that the employment situation in the United States isn't exactly strong, so that one has to wonder what the demand will be. In the end though, I do believe that it will be the currency the drives the commodities market, and as a result I do not expect to see any massive move to the downside anytime soon.
