The WTI Crude Oil markets fell hard during the session on Monday, as we continue to see bearish action in this market. All things being considered, it makes sense that we have fallen at this point as the markets have been a little bit ahead of themselves over the course of the last several weeks. However, the pullback is starting to run into the support area that I suspected buyers will start to come back into play.
Looking for supportive candle in this general vicinity is what I'm going to do as far as trading this market. I am only buying, as I think this market will eventually go higher. However, in the short term I believe that this market will continue to fall, as it tries to find enough support in order to reverse the last couple of days and its bearish momentum.
Pay attention to the Federal Reserve, Syria, and Egypt.
The Federal Reserve will of course be front and center when it comes to the value the US dollar, which of course will have a massive effect on the price of oil itself. On top of that, there will be plenty of concerns with Egypt and Syria both causing a lot of headlines that will move not only the value of the dollar, but the value of oil as well. With that being the case, I feel that more than likely this market will find enough support to get buyers interested again, which will continue the longer-term trend higher. In fact, I think that there is a ton of support below, and therefore selling is going to be almost impossible for the next several weeks.
The only scenario in which I can see that the oil markets might fall drastically as if peace breaks out in Syria, and the Federal Reserve does in fact start tapering off of quantitative easing. If they do, that should push the value the US dollar higher, which of course would push the value of commodities in general down as they are all almost always priced in that currency.