WTI Crude Oil Forecast: Market Saves Itself

Christopher Lewis

What I think we have seen is lot of volatility and it suggests to me that we are going to be looking at major problems, especially as the inflation trade is starting to get whacked.

The West Texas Intermediate Crude Oil market fell rather hard on Monday as the “risk off” situation has taken hold at all points. The gap lower is a very negative turn of events, but we did save ourselves at a previous trend line. Nonetheless, this is a market that certainly seems as if it has had a massive “shot across the bow.”

If we were to break down below the bottom of the hammer, that would have the market testing the $65 level, an area that has been important previously as we have bounced rather hard from there. That being said, the market is looking for some type of selling pressure above to attract more downward action. The gap above will more than likely try to get filled, and it could end up being a nice area for selling.

As far as buying is concerned, I have no interest in doing so until we clear the $73 level, which is a large, round, psychologically significant figure, and an area where we have seen a lot of resistance previously. Breaking that would be a major breakout and would probably have a lot of money flowing into the market to chase the move. Above there, then the $79 level could be a bit of a target. Nonetheless, what I think we have seen is lot of volatility and it suggests to me that we are going to be looking at major problems, especially as the inflation trade is starting to get whacked. Now that the Federal Reserve finally has recognized that there is inflation, the market is already looking past all of that and suggesting that perhaps we have major issues ahead. Whether or not it lasts is a completely different question, but clearly this session on Monday will have scared quite a bit of the market.

I am going to wait a day or two, and then start shorting again unless we see some type of major meltdown. I think we are seeing a market that is trying to figure out where it wants to go for the bigger move, but it is worth noting that the biggest candlestick by far over the last several months has been bearish and horrifically bearish to boot.

WTI Crude Oil

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.