The WTI Crude Oil markets fell during the session on Monday, as the $98.00 level offered far too much resistance. That being the case, it feels as if the market is going to pullback from here, which of course would be healthy considering the impulsive move that we've had over the last couple of sessions. Going forward though, I still think that this market will eventually break above the $99 level, the next resistance area above.
If we can get above the $99 handle, I don't see any reason why we will hit the $101 level, and possibly even further up. If we get above $101, it signifies that the market would reenter the consolidation area all the way up to the $104 level, which of course is the top of the previous region that the market seem to be so interested in.
Watch the Brent markets.
Watch the Brent markets going forward, as the sold off rather harshly during the session on Monday. Losing roughly 2.6%, the Brent markets sold off based upon lack of European demand, which of course could translate in this market as another bearish reason for the market to pullback. I don't necessarily think it's going to happen, based just upon the way the markets acted over there, but I do recognize the fact that the two markets do tend to move in tandem quite a bit. With that in mind, keep in mind that we could get a bit of a "sympathy move."
Below current trading, I see that the market could pull back to the $95 level, which of course should offer significant support. Because of this, the pullback that could come in my opinion is going to be a nice buying opportunity, simply because her so much noise below that area. Watch the Federal Reserve and whether or not the US dollar is depreciating, as the dollar typically moves counter to this market. It doesn't have to, but it is one of those things that you can watch to get a little bit of a "heads up" as to where oil is about to head.
