The WTI Crude Oil markets did very little during the session on Thursday, as one would expect as the Americans celebrated Independence Day. Because of this, it's very difficult to garner any real information from the daily candle, especially considering the fact that the Egyptian military has taken control again after the markets closed on Wednesday.
A lot of this reaction has been to the concerns of the Suez Canal closing, as the Egyptian political situation gets more and more murky. However, it seems to me to be almost impossible to imagine Egypt trying to shed on the Suez Canal, simply because it is roughly the only way they're going to make money anytime soon anyways. Tourism is all but dead in Egypt, and as a result the money brought in by the Suez Canal is absolutely vital at this point.
Waiting for the selloff
For me personally, I believe that this knee-jerk reaction has been way over done, and it's only a matter of time before the market sells off again. The US dollar continues to gain in value overall, and because of that I will be looking for a resistive candle to start selling this market. In fact, I may even drill down to the four-hour chart in order to place that trade.
I'm not looking for some type of meltdown, just simply a move back below the $100.00 level at the very least. In my opinion, it would not be surprising to see this market fall back into the previous consolidation area, and that could mean a much lower level. However, there is no guarantee at this point in time so I am being somewhat patient to look for my sell signal going forward.
As long as a US dollar continues to strengthen overall, this market will be under pressure as it is of course priced in US dollars. Over the longer term, there is a negative correlation between the currency and the market, and I believe that sooner or later we will go back to that correlation again. Because of this, I am patiently waiting to sell.