The WTI Crude Oil market had a pretty strong showing during the session on Tuesday, but towards the end of the day did show some weakness to close at roughly $95.00. This of course is a significant large round number, but in the end it has been sliced through so many times recently that I am choosing to ignore it. What I am paying attention to however, is the fact that the last couple of four-hour candles have been a bit resistive looking.
I still believe that we are essentially stuck between the $92.00 level and the $97.00 level for the foreseeable future. Looking at this chart, I think that we are essentially in the middle of age" no man's land", and as a result I don't really have a trade. I suppose I could make an argument for shorting this market on a break below the $95.00 handle, but there is enough below to cause considerable choppiness.
Occam's razor
When it comes to trading, or anything else for that matter, I believe in the old Occam's razor policy. William of Ockham was a medieval philosopher who had suggested that perhaps the best way to do anything, and the simplest solution to any problem is normally the correct one. In that spirit, I am simply selling this contract as we approach $97.00, and buying it near the $92.00 level.
.jpg "Crude Oil 4hr")
It'll be interesting to watch what happened with this contract in the future. I have been reading a lot of information about how OPEC is in serious trouble now that the Americans have found through shale oil and fracking the ability to produce every bit the amount of oil that Saudi Arabia does. Granted, the Americans aren't up to that production yet, but I have a hard time believing that it won't be the norm into the future. This will be especially true once Mr. Obama leaves office, as Americans tend to replace one extreme what the other. My suspicion is that the next president will be much more pro-oil than this one. Once that day comes, oil may suddenly become a very cheap commodity. In the meantime, I find this market very calm and stock.