Crude Oil Price- Oct. 22, 2013

The WTI Crude Oil markets fell hard during the session on Monday, plunging down towards the $99 handle. However, the $99 level is the bottom of the support zone that I had been talking about, so I do not have a sell signal yet. Why frankly, the candle does look very bearish, but until we clear the $99 level to the downside on a daily close, I am a bit hesitant to start selling. This is because there is such a massive amount of support and noise just below that area that I feel it's going to be a difficult road lower.

A lot of this will come down to the value of the US dollar and of course the question of supply and demand. That is what makes today such an interesting session to study and perhaps gather some type of information as to where the market is going next. We have the nonfarm payroll numbers coming out later today, and that of course will have a massive effect on whether or not the Federal Reserve can taper off of quantitative easing anytime soon. I personally believe that they won't be able to, and this should weaken the US dollar.

The value of the dollar counts, but it depends on what the markets are paying attention to.

The value of the US dollar counts of course, but I am a bit concerned because a weak jobs number could also have the market thinking that there will be less demand for crude oil, so honestly this is one of those situations that could go either way, and as a result I will not be placing a trade until the market closes for the session. The last thing I want to do is try and figure out exactly what the market is trying to think, based upon the jobs number itself. What I need to see is the reaction. If we get that daily close below the $99 level, I think this market really could fall apart. However, if the market focuses more on the value the US dollar, it's very likely that we will get a significant bounce. 24 hours from now, I will have a trade to play more than likely, but between now and then it's going to be very dangerous to be in this market in my opinion.

Crude Oil 102213

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.