WTI Crude Oil Forecast: Market Will Continue to Chop - 5 August 2019
The West Texas Intermediate market has been very choppy during the day on Friday, which isn’t a huge surprise considering we are hanging around the $55 level. This is an area that will attract a lot of attention being a large, round, psychologically significant figure and an area where we have seen both support and resistance as of late. The candle stick is essentially a “harami”, a candlestick that can be thought of as bullish sometimes. However, I think there are a lot of different things going on right now that could throw this market into absolute disarray.
That being said, I think it’s easiest to buy this market on a break above the top of the candle stick for the Friday session and aim for the red 50 day EMA. Alternately, if we break down below the massive red candle stick from the trading session on Thursday, then I think the market probably goes looking towards the $51 level after that. Ultimately, the candle stick being as negative as it is from the Thursday session does suggest that we are going to go lower. That being said, there are some other things that I would look at when it comes to the oil market that might give us some clues.
With this nonsense going on between the Americans, British, and the Iranians being in the headlines and oil stains stable and not necessarily taken off, tells you a lot. It wasn’t that long ago that would have made this market spike through the roof. Obviously, the dynamics have changed as people do not worry about the Iranians as much, mainly because the Americans are now pumping out more oil than any other country on the planet. The Canadians are the biggest country of origin when it comes to crude oil for Americans that are not consuming domestic product, and there’s very little likelihood of the Iranians invading Alberta.
With all that being said, I do believe that selling this market is much easier than buying in and I do think that the 50 day EMA will cause a lot of problems. If we were to break down below the $50 level, not something that I expect to see in the short term but something that could happen, that would be extraordinarily negative and could open up the floodgates to the downside.
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