By: DailyForex.com
The WTI Crude Oil markets fell rather drastically during the session on Thursday, but you can also see that they rallied during the later hours in the American session. The chart attached is article is a four-hour chart, and it's just that we are coming up on a "middle point" of the larger consolidation area. This area that focuses on the $94.50 level is essentially what the market deems as "fair value." A cousin this, the market will bounce around and offer this level over and over.
.jpg "Crude Oil may 24")
This market certainly had a nice rally words the end of the day, and this of course does suggest that perhaps we are heading back towards the $97.00 level. I think that if we can get above $95.00, that will more than likely happen. It will be choppy, but then again so were all commodity markets these days.
It's all China's fault
Early in the morning on Thursday, the HSBC Flash PMI numbers came out below 50, signaling that there is a bit of a contraction going on in China as far as manufacturing is concerned. This of course asked a lot of questions about global growth, which of course asked a lot of questions about the need for oil.
However, you can see that a lot of sensibility came back into the marketplace, because quite frankly the Nikkei had lost over 7% which of course was a ridiculous reaction to a number that is just barely under the 50 level. Because of that, it started a chain reaction of massive selloff, but the Americans started buying assets late in their trading session, stabilizing the global financial markets. Because of this, I feel that this market will more than likely try to rally, but again I would need to see it go above the $95.00 level.
I see nothing in this chart that suggests to me that we are going to breakout the consolidation area between the $92.00 level on the bottom, and the $97.00 level on the top. Quite frankly, I think we may have just found our summer range.