- The West Texas Intermediate Crude Oil Market, or US Oil, has been rather noisy over the last couple of days, but on Thursday we are trying to bounce from the 50-day EMA.
- All things being equal, we are essentially in the middle of a larger consolidation area near the $72 level at the bottom and the $84 level on the top.
- As we are hanging around in the sideways range, the question then becomes what happens next?
It'll be a difficult market to trade in because I think at this point in time, you have a lot of external factors going on as well. For example, the tension in the Middle East will of course continue to work to support the price of crude oil, but at the same time, you also have to worry about the economy slowing down and therefore driving down demand.
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End of the Cycle?
We are getting towards the end of summer, which is the high season for crude oil demand. So really at this point in time, you would have to say that this has been a less than stellar summer. It hasn't exactly been horrible. It just hasn't been overly exciting for those bullish on crude oil. At this point in time, I think if you could break above the $80 level, then we could see the market go looking to the $84 level.
If we break down below the $77 level, the $75 level will be targeted. And then again, we could test the $72 level underneath there. The stochastic oscillator is overbought and crossing over to show signs of weakness. So, while I don't necessarily place a trade based on that alone, it does suggest that perhaps it is going to be a little bit sluggish. In general, we have a handful of levels that we need to be watching and those will tell us where the market is more likely than not going to go.
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