By: DailyForex.com
I know I have recently suggested that I was only going to use short term charts to demonstrate with going on in the WTI market, but quite frankly the action today was significant enough for me to pull back and look at the daily chart.
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Federal Reserve Chairman Ben Bernanke spoke in front of the U.S. Congress during the session on Wednesday, suggesting that perhaps a tapering off of quantitative easing could be coming much sooner than most of the market anticipated. Because of that, the markets have fully freaked out and thought nothing the US dollars later in the session. This of course affected the value of the WTI contract, as we plunged towards the $94.00 level.
The reason this area is significant to me is the fact that we had formed such a beautiful hammer their just five sessions ago. This should be very supportive, and as a result I would expect some type of bounce from this point. It doesn't mean that I'm ready to start buying at this level, far from it. I need to see some type of supportive candle, perhaps on the hourly chart at the least, in order to start buying.
Plenty of support below
Quite frankly, I find it difficult to short this market until we get below the $92.00 handle. Because of this, I am simply going to sit out and watch it move back and forth knowing that we are heading into the summer months. The summer months of course tend to be very range bound, and again I still believe that we are trying to figure out that ranges we speak. I think that the $92.00 level could in fact be the bottom that range, while the $97.00 level looks certainly like it could be the top.
This market is incredibly lazy when it comes to picking ranges. It tends to pick $5 intervals, and when it's feeling a bit more "frisky", it will choose $10 intervals. Because of this, this market should be thought of as one of the more technical ones out there. I think we are trying to find an interval, and right now this area is the best candidate. If I am correct in this thinking, I will get a supportive candle to start buying on the short term charts. If not, it really doesn't matter because I think there will be a lot of money to be made in this market over the summer months, while everybody else is sleeping and ignoring this market because it's become so "boring."