The WTI Crude Oil markets fell during the bulk of the session on Thursday, but found enough support below the $100 level to turn around and form a hammer. The last four sessions have featured a hammer, another hammer, a shooting star, and now a hammer again. This suggests to me that we are seeing a lot of indecisive trading at the moment. This is most certainly the domain of short-term money at best, and as a result I find it difficult to trade this market with any significant amount of money.
Going forward, I think that the market more than likely will continue higher, because every time we pullback we see the hammers form. After all, this may seem a bit simplistic but it is true that three hammers trump one shooting star.
Cluster just above.
If you look back at the month of September, you can see that we were clustering just above current levels. Because of this, I feel that the resistance is strong, but the fact that the market continues to form hammers day after day suggests that the buyers are willing to step in every time the market falls. Because of this, I believe that eventually we will break through this cluster, but recognize the fact that there is a lot of resistance going all the way to the $104 level, and as a result it’s difficult to get overly bullish of this market. It’s true that I believe the markets going to go higher, but at what cost?
In a market like this, it’s best to look to the longer-term charts for some type of signal, or better yet even trade it via the options market. The options market could be used in a lot of different ways, but nonetheless I am bullish and any of the bullish setups would work for me. I believe that as long as we can stay above the $95 level, this market will continue to go higher. With that, I believe that pullbacks will be buying opportunities if we get one.
