The WTI Crude Oil markets initially fell during the session on Wednesday, but as the market progress through the session, we saw enough buyers step in to form a hammer. With that, it suggests that the market is in fact going to try to go higher, and on a break above the $98 level I see no reason why it won’t. The FMOC meeting announcement came out during the session, and that did cause quite a bit of volatility around the marketplace, not only in crude oil, but in the currency markets as well. That being said, by the time the dust settled, we deftly have a supportive candle in a market that looks like the buyers are still in control.
Even with the buyers in control, we have to recognize the fact that there is a lot of noise above that will keep this market from going too high in a short amount of time. The $100 level above will more than likely be resistive from a psychological standpoint, and ultimately we could go higher than that. If we do, I think that the market will enter a new bullish phase, which could be bought on dips.
At the end of the day, the markets settled very little
As the FMOC announced that it was cutting at $10 billion from quantitative easing, at least in the form of bond buying, this ended up being something that the markets looked as if they expected. After all, a lot of volatility was simply expended to change very little at the end of the day. That’s a lot of drama and aggravation for traders, and this is why trading on a major announcement is always very difficult. In fact, it’s a bit of a sucker’s game.
The downside in this market seems to be protected by a lot of little noisy areas, and I do believe that the $95 level will be very supportive. Because of this, I believe that the short-term traders will continue to run this market, and generally have an upward bias.
