The WTI markets initially fell on Friday, but recovered quite nicely and broke above the $96.00 level. The resulting candle looks a bit positive to me, but I have to admit that I still think that this market is currently in a consolidation area, and that the top of that is at the $97.00 area. With that being the case, it is going to be very difficult to start buying at this point.
However, I don't see weakness in this market at the moment that would lead me to believe selling is the wise thing to do. In other words, I'm presently "stuck" at this point as I await some type of resistive sign, or a nice long positive candle that breaks above the $97.00 level. Until then, this market is essentially going to be a bit scary for someone who wants to try and turn around and short it.
Consolidation not broken, look to outer edges for guidance
It when the consolidation area holds true like it has for so long, I typically will look to the outer edges of the consolidation area for guidance on which way to go. I think that shorting this market on the right resistive candle around the $97.00 level will be the way to go for me personally, but I would like to see at least a resistive candle on the hourly chart to even start to think about that. Alternately, I also need to see weakness in other commodities to drive this point home.
Going forward, I see far too much in the way of resistance to think that this market is going to have an easy time higher. Also, if we start to see the US dollar gained strength again like it showed later in the day on Friday, it's possible that oil markets will selloff. We'll have to wait and see, but I still think with the approaching summer, it's difficult to imagine that there some explosive move in the oil markets waiting to happen.
