Looking at the market, you can see there Monday was less than spectacular. However, it appears that the 50 day EMA is in fact going to offer support, and therefore I would anticipate some type of short-term balance to keep the market between the 50 day EMA on the bottom and the 200 day EMA on the top. Ultimately, if we can make some type of significant move out of this range, then we can follow their trading. Paragraph break above the 200 day EMA should send this market towards the $59 level, which is the beginning of resistance to the $60 level. However, if we were to turn around a break below the $55 level, which is extensively the 50 day EMA, the market within go looking towards the $53.50 level.
Crude oil has a lot of different influences right now, as the demand picture is a bit convoluted. After all, it appears that the global economy is slowing down but there is also talk of OPEC cutting production, trying to balance out the market. Because of this, I believe that the market is trying to carve out a longer-term range right now, and it’s very likely we are right in the middle of it.
I believe that the overall “floor in the market” is at the $50 level, with the $60 level above likely to be the top. This would also make quite a bit of sense due to the market looking to consolidate in this area which is right around what would be “fair value.” Because of this, I would anticipate a lot of short-term choppiness boat if we do reach towards one of those major levels, then you can look for a reversal set up.
I believe that pretty short-term chart will make much more sense in this market, and it also could be somewhat quiet during the day on Tuesday due to the FOMC announcement on Wednesday. After all, that will have a major influence on what happens with the US dollar which obviously has a lot of influence on what happens with commodity such as the WTI Crude market. Short-term back-and-forth training probably works out the best, but if we get a daily close above the 200 day EMA then the market continues to grant higher, just as a daily close below the 50 day innovations in this market granting lower. However, I’m not looking for major moves.
