The WTI Crude Oil markets fell during the session on Tuesday, but found more than enough support down at the $101 level to turn everything back around and keep the market afloat. In fact, the support was strong enough to push the markets up roughly 1 dollar, which formed a nice-looking hammer for the daily candle. With this hammer, I suspect that we are showing that the market wants to go higher again, but we are and what I would consider to be a fairly tight consolidation range of the moment.
It would not surprise me all to see this market go sideways for a little bit, but I would suspect that the best way to be in this market is the long, and certainly not short. Even if we do go back and forth, quite frankly I don’t want to be bothered shorting this market as it has been far too bullish over the last two months. That being said, a pullback would necessarily surprise me either, but I suspect that the $100 level is going to be massively supportive at this point.
$104 is the trigger for much higher prices.
The $104 level for my money is the level that we need to overcome on a daily close to see this market go much higher. At that point in time, I would suspect that the market would eventually find the $110 level, which has been significant support and resistance in the past. Because of this, I would certainly be heavily bullish of this market above the $104 level. However, nothing moves straight up or straight down when it comes to financial markets, and this one certainly won’t be any different. Nonetheless, I still think that the crude oil markets are going to continue to improve over the longer term.
The market looks like it is just breaking out of a “W pattern”, which of course is a very bullish sign as well. Based upon the measurements from that pattern, I would suggest that the market is probably going to target roughly $111 or so eventually.