The WTI Crude Oil markets rose during the session on Friday, as the general “risk on” rally continued despite very uninspiring jobs numbers out of the United States. With that being said, we are approaching the $100 level, which I believe is a fairly significant resistance area, which probably extends all the way up to $101. With that being said, if I were not already in this market I would wait for breakout above that level to consider it, but I think that the next few dollars will be difficult to gain. I would not be surprised at all if we had to back up a little bit in order to pick up enough momentum to continue the uptrend. Interestingly enough, I would also note that a break above the $101 level would in fact be a completion of a “W pattern.”
Buying on the dips…
I will be buying on the dips going forward, as I think this market has shown that it simply “wants” to go higher. The demand picture and quantitative easing are nice things to think about, but sometimes you simply have to go with the flow of the market, and at the end of the day – why does it matter that the market is going higher? It only matters that it is – and you are long. Someone told me this a long time ago, and as simple as it sounds – it truly is the only thing that matters.
With that, I look forward to the dips as buying opportunities, and believe that looking for short-term pullbacks that show supportive candles will be the best way to get involved. The market should be supported heavily at the $97 level, and it would take a daily close below that level in order to start thinking about a short position. If that happens, I would suspect that the market would simply continue the consolidation, sending itself back down to the $92 level, as it has already shown itself to be massively supportive and I see no real reason why it wouldn’t continue to be at this point.