The WTI crude Oil markets fell during most of the session on Wednesday, but as you can see found enough support at the $106 level in order to form a nice looking hammer. This hammer of course is very supportive, and I think that a move above the top of the hammer, which is essentially the $108 level, is a nice buy signal. This of course is a short-term trade as far as I can tell, simply because there are far too many moving pieces out there in order to hang onto any particular trade for any real length of time.
That being said, I believe that the $110 level is about as much is you can ask for out of this move, and as a result I think short-term traders will do quite well in this market. As far as selling is concerned, it's almost impossible simply because there is far too much support below. Even below the $106 level, there is so much noise that I really wouldn't be comfortable selling into we broke below the $102 level, something that looks very unlikely at this moment.
Federal Reserve still matters
The Federal Reserve and whether or not it chooses to taper off of quantitative easing will be the biggest factor in this market. However, there are Middle Eastern concerns as well, so it will be a very volatile market overall. Nonetheless, I do believe that this market will eventually find its footing based upon what the Federal Reserve ends up doing. If they do in fact taper off of quantitative easing, that drive the value of the Dollar higher, which of course send this market lower most of the time. On the other hand, if they do not taper, I believe that this market will skyrocket as the Dollar crumbles.
We will know in the next week or two but until then it's really difficult to place any trades for any real length time. That is why I am looking at the short term charts overall, but the reason I brought this daily chart to your attention is that it did form a nice buy signal.
