The WTI Crude Oil markets rose during the session on Monday, challenging the top of the shooting star that the market had formed on Friday. This is typically a very bullish sign, and as a result I believe that this market will continue to go a bit higher. The real question at this point in time is whether or not we can break above the $96 level. After all, there is a gap at that area, which should provide significant resistance.
Because of this, I think that this market is going to be a little bit range bound over the course of the next couple of sessions. That gap will cause resistance obviously, but I believe that this market is going to be bound by the fact that the nonfarm payroll number comes out this Friday. With that being the case, I think there's just going to be too many questions asked of economic strength in America to see this market take off in one direction or the other.
Choppy until Friday.
I believe that this market will continue to be choppy until Friday, as the market will wait for that jobs announcement. Going forward, we could expect to see some type of move based upon that number, but only if it is much stronger or weaker than anticipated. If we get some type of in-line number, then the market will simply just grind sideways a bit farther.
If the number comes out stronger than anticipated, that should drive up the value of the US dollar, and I believe that initial reaction will be to sell the market off. However, ultimately I think this will bring up the question of demand, and whether or not it's about the increase, which should be positive for the oil markets. Alternately, we could see a poor jobs number, which should weaken the US dollar overall, as it will make tapering from the quantitative easing program very difficult for the Federal Reserve. With that being the case, I would venture to say this market is about to bounce significantly. However, waiting for the right set up is paramount.
