Crude oil markets have been very noisy on Tuesday, as traders continue to see a lot of headlines out there that are causing chaos.
Crude Oil
Crude oil markets have been very active during the trading session on Tuesday as you would expect. The market gapped lower but then turned around to race higher and then broke down to test the $7,800 level.
At that point we then turned around and showed signs of life again as oil is all over the place and pretty much impossible to trade. While I would only have one direction in mind and that of course is to go long of the crude oil market I would also point out that there's been some really nasty sell-offs from time to time and with that being the case I think position sizing will be about the only thing you can do to protect yourself.
Geopolitical Headlines and Strategic Reserves
Oil was moving on the latest headlines of whether or not there is going to be some type of release of the strategic petroleum reserves that various countries hold but it's also worth noting that market participants are also reacting to statements coming from Donald Trump such as him stating that it's possible that he could talk to Iran.
I think at this point in time it's probably best left alone but over the longer term I do believe that we will eventually settle lower probably once the hostilities stop.
Whether or not that actually happens anytime soon remains to be seen and this of course is a very fluid situation that we will have to monitor very carefully. Quite frankly the simplest way to deal with oil is to not deal with it. I think this action that we have seen for a while is going to be a market that wipes out a lot of accounts.