The WTI Crude Oil markets barely budge during the session on Monday, as the Americans were away on Memorial Day holiday. On top of that, the British were away as well on something called Spring Bank Holiday, so of course the volumes were very limited. That being the case, I can only look at this chart from an overall perspective, and try to glean some type of technical analysis.
The attached chart is a four-hour chart, and you can see that we have been in a range cents the end of April between the $92.00 level, and the $97.00 level. This market loves to go back and forth in the technical consolidation, and the fact that we are heading towards the summer months certainly makes me believe that we will continue to do so. It is quite common to see this market bounce around between to very specific numbers, and then eventually breakout and going to another consolidation area. I think that we are trying to form what will be the basis of summer trading as large traders go way to holiday in the next couple of weeks.
$5.00 being the range
This market looks like it wants to bounce around in a $5.00 range, and although this relatively tight as this market tends to favor the $10.00 variety, it doesn't surprise me as there are so many economic headwinds in both directions. There is a large amount of uncertainty in the marketplace, and the crude oil markets tend get the brunt of uncertainty as they are direct indicators of economic expansion or contraction.
One of the things you have to watch going forward will be the numbers out of China. They have recently been a bit weak, and as a result could bring down the value of oil. With that in mind, I think that I will simply buy this market at the $92.00 level, and sell it at $97.00 as it reaches there. Otherwise, there really isn't much to do in this marketplace until something significant happens via the headlines or economic announcements.
.jpg "Crude Oil 4hr")