The WTI Crude Oil market fell during the session on Tuesday after initially trying to form gains. You can see that the $105 level did offer support, and that's not a surprise considering that it is such a large round psychologically significant number. However, I still see that this market is basically in consolidation between 103 on the bottom, and 109 on the top. Because of that we are essentially in "no man's land", and because of that I am sitting on the sidelines right now.
This market has been very choppy, and unless you are a short-term trader, it's probably been almost impossible to trade. With that being the case, it's very possible that this market will drift down to the $103 level, but I'm not interested in risking my trading capital at this point time. The summer months are horrible to trade in the oil markets at times, simply because there is no volume compared to the rest of the year.
Range bound trading should continue until the middle of September
I believe that this range will probably hold until the middle of September. That is a meeting of course, and there is always the potential for some type of headline across the wires that throws the market into a tantrum. All things being equal though, I do believe that this is the range that we are going to see until we get the large trading houses back online as most of the, or at least their major traders, are on vacation.
I believe that a break down below the $103 level leads to a move all the way down to the $99 level, and it would be more than likely fairly quick. On the upper side though, if we get above the $109 level, I expect the $110 level to offer enough resistance that the market may struggle to get above it. In other words, this market is probably more likely to fall than rise in the short term. Nonetheless, I still think consolidation is probably what we will be looking at for some time.