The WTI Crude Oil markets initially tried to fall during the session on Wednesday, after initially gapping slightly higher. However, there was enough support below in order to form a hammer, and this of course is a very bullish sign. I see this market as being very bullish overall, and would be more than willing to start buying in this general vicinity. Quite frankly, I see quite a bit of support down near the $96 handle as well, so there's no way for me to short this market, even though we are definitely in the throes of a longer-term downtrend.
Speaking of which, there is also the possibility that this was simply an "accumulation phase.” After all, there was a significant sideways move. That was followed by an impulsive move higher. This would of course be classic technical analysis, as the so-called "smart money" starts to enter the marketplace and buy the market as it is a bit on the cheap side.
$98.50, and then $101.
A break of the top of this hammer for my money. Since his market to the $98.50 level first, and if we can get above the $99.00 level, I believe that this market will go looking for the $101 handle. At the $101 handle, I suspect that there will be a significant amount resistance though, as it is the bottom of the consolidation area that we had seen going all the way up to the $104 handle.
A lot of this will depend on the jobs number on Friday, but other things aren't play at the moment as well. After all, OPEC suspect that there is still strong demand in the marketplace, and of course what OPEC says moves the markets. If we did pullback from here and broke the bottom of the hammer, although it is a very sign in general, I think there is enough support below that we simply cannot short until we get below the $93 handle, something that does not look very likely to happen anytime soon based upon the impulsive move that we saw on Tuesday.
