The WTI Crude Oil market had another positive session on Friday, breaking above the $97.50 handle, an area that I thought would be a bit more resistant than it turned out to be. However, as you can see we have pulled back below the high back in late March, and as a result we are still somewhat tied to this range. However, I believe that a break of the highest for the session on Friday will have a fresh new leg higher appear.
On the chart, you can see that I have the 50 day exponential moving average. While it isn't giving as much in the way of technical signals, you can see that it has essentially gone sideways for the last several months. This shows just how sideways the market action has been, but you can also recognize the fact that the average is starting to tilt just a little bit higher, signaling that we may perhaps be getting ready to see a significant breakout.
$100 a barrel?
One has to believe that the market is trying to breakout to the upside based upon the action. Whether or not it can would be a different question altogether, but it appears that if we do breakout that we are going to see $100 a barrel again, something that typically results in a significant selloff later. On the other hand, if we don't give that breakout we will simply remain true to the range area that I had talked about so many times now.
That being said, the daily close above Friday's high would be enough to convince me that this market is a buy waiting to happen. On the other hand, if we fall during the session on Monday, this could lead to a grind it back down as low as $92.00. With that being said, I am waiting for the close of today's candle in order to make some type of trading decision in this market. It's been very choppy and difficult to trade lately, so caution certainly is warranted in this type of environment.
