The WTI Crude Oil markets fell rather significantly during the session on Tuesday, breaking below the $103 level and the bottom of the hammer that had formed on Monday. On top of that, we managed to close below the $102 level as well, and that of course is a very bearish sign. We did bounce a little bit off of the bottom, but at the end of the day it appears that the market is probably going to be a bit on the soft side in the near term.
I feel that there is a significant amount of noise below though, probably going all the way down to $97. It’s going to be difficult to short between here and there, so I quite frankly feel that it’s going to be probably easiest to look for a supportive candle between here and there that makes sense, and then start buying. Obviously, after the significant selloff that we had during the Tuesday session, I would be a bit hesitant to do it right away.
Pullbacks can often be nice opportunities
Pullbacks can often be nice opportunities in uptrend, and although we did fail at the same spot, the $105 level, the fact is that the market has bounce significantly over the course of the last several months. With that, I feel that this market is still essentially in some type of consolidation, but it is with an upward bias at this point in time, I don’t feel that you could argue that point anymore.
There will be people that will be looking for the $105 level to be a bit of a double top, but think that’s stretching it a bit. Obviously, we could breakout from here, but I think that there’s so much noise between here and the aforementioned $97 level, but it’s almost impossible to feel comfortable shorting. If we do not get the right supportive candle, I would be willing to buy above the $105 level, as it would in fact show a significant breakout and the proclivity for the market to head to the $110 level over the longer term.