Crude Oil Price- Oct. 28, 2013

Christopher Lewis

In the WTI Crude Oil markets rose during the session on Friday, breaking the top of the Thursday hammer. This of course is a classic bully signal, and as a result I am long of this market for the short term. But that is the key term: short-term. I believe that this market will continue to go higher until we reach roughly the $100 handle, where the large round psychological significance of that number will come into play. On top of that, there is a significant amount resistance waiting happen at the $101 level, so I can see a lot of reasons why this market may struggle to go much higher.

All things being equal, I think this market could offer to trading possibilities. We could get the bounce that I'm thinking of, and then see enough resistance near the $100 level in order to start shorting again. That of course is a little bit more dangerous type of trading, as you're simply going back and forth in very short order, but at the end of the day this is a market that likes to consolidate.

Oversold

Right now, I believe this market is most deftly oversold for the short-term. Whether or not we can get below this $96 level is a completely different question, because I do see a lot of noise below it. That of course could cause a few problems, but in the end I believe that the markets will ultimately go higher anyway, probably as a result of the weaker US dollar more than anything else. The US dollar of course will continue to weaken based upon the Federal Reserve and its loose monetary policy, as the inability of the Federal Reserve to taper off of quantitative easing will continue to play any gains in the US dollar.

All that being said, I believe that this market is essentially going to tread water above the $96 handle for the longer-term as well. I think we will more than likely see this market go sideways for a bit of time, and then eventually go higher as the US dollar gets punished longer-term.

Crude Oil price 102813

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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