The West Texas Intermediate Oil market had rallied a bit during the trading session on Thursday but has given back some of the gains to show less than favorable price action. At this point in time, the very likely that the market will continue to be noisy and perhaps may even drop a bit based upon the price action. That being said, the market is likely to continue to see a lot of noisy behavior, but it may simply be trying to stabilize a bit after a huge move to the upside.
The $85 level underneath is a significant support barrier from what I can see, based upon previous action where it was a significant high that we finally break through, pulled back to, and then rallied from. Furthermore, we have the 50 day EMA hanging about the same region, which almost always captures a little bit of attention. Because of this, the market is likely to continue to be a “buy on the dips” type of situation, but that does not necessarily mean that is going to be easy.
Crude oil is a market that will continue to see a lot of geopolitical volatility added to it, as the Russians and the Ukrainians continue to play their game. Ultimately, this is a situation that is probably best described as being tenuous at best, and that we will more than likely see plenty of volatility going forward. I do believe that we continue to go higher over the longer term, as the world reopens. However, there are some growth concerns, so it is not like we are still in the same phase we had been in previously where there was “easy money to be made.” I think you are going to have to look for little bits of support on short-term charts and take trades for short-term move. The markets overall simply are not trending right now, they are chopping around as algorithms jump in and out based upon the latest Tweet. In that environment, the retail trader does not stand a chance for hanging onto trades, so you are better off looking at short-term charts. Right now, I still favor upside moves, but you are going to need to watch the charts on lower time frames like the 15 minute in order to get those opportunities.
