The WTI Crude market had a strong showing during the session on Monday again, smashing above and trying to break above the $95.00 handle. It is at the $95.00 level that I feel this market could go much higher if we get above. However, in the meantime I think there is significant cause for concern if you are bullish.
It appears that the $95.00 level is significant resistance, and that the $92.00 level is significant support. With this being the case, we could be forming a bit of a consolidation area, which is roughly $3.00" tall." If that's the case, we could see a lot of choppy trading in the near-term, as the market will try to break down the other side of the trade.
We are entering the war months, and there is a possibility that the old adage of "Sell in May, and go away" may come into play. If that's the case, the oil markets can get very quiet during these times, barring some type of international headline that shocks the world, normally out of the Middle East.
Tight ranges
The one good thing about the oil markets is that they tend to be very technical in nature. Because of this, it is quite easy to tell what the ranges will be from time to time, and it should be fairly obvious if the above predicted area is going to be what we are trading in for the near-term. If you're shorter-term trader, this $3.00 area could be enough of a range for you to take advantage of extreme volatility.
However, if you are a swing trader you may find this chart a little difficult to trade at the moment. In fact, you may see the summer come in and wipe out any chances a decent swing trading. I have seen this happen before, and unless something changes, I don't know that there is a catalyst out there to move the commodities market anytime soon, at least not the oil markets. However, if we manage to break out or down from this range, I am more than willing to start following the market.
