- The West Texas Intermediate Crude Oil market experienced a significant drop in value early on Thursday but was able to rebound after hitting a hard floor at the $65 level.
- This rebound was quite significant, leading many to believe that a large player had entered the market to put a floor in place.
- There are a few possible reasons for this, including OPEC's involvement or the United States' efforts to refill its Strategic Petroleum Reserve.
Regardless of the reason, the $65 level now appears to be a hard floor for the short term, and investors should look for signs of exhaustion to sell into. This means that the next few days may be more about observing the market than making any significant moves.
The Brent market also experienced a significant drop in value on Thursday, breaking below the $70 level before bouncing back above $72. This suggests that the market may be following a similar pattern to the West Texas Intermediate Crude Oil market, with a few days of recovery before a potential selling opportunity arises.
Wait for Signs of Exhaustion
For traders looking to take advantage of the market's movements, it may be best to wait for signs of exhaustion before making any significant moves. This means looking for indicators that the market is running out of steam, which could include the formation of specific types of candles on a daily timeframe. I would not get involved in lower timeframes now.
However, it's worth noting that short-term traders may be able to take a risk and capitalize on the rebound that has occurred. While they may be fighting the overall trend of the market, there is still potential for profit in the short term.
Ultimately, the next few sessions are likely to be quite noisy as the market adjusts to the recent movements. However, for those who are patient and willing to wait for signs of exhaustion, there may be significant opportunities for profit in the days and weeks ahead.
At the end of the day, the crude oil market is experiencing significant volatility as investors grapple with several different factors that are affecting its value. While there are signs that a hard floor may be in place for the short term, there are still plenty of opportunities for profit for those who are patient and willing to wait for signs of exhaustion.
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