The WTI Crude Oil markets had a tough day on Friday as all games were wiped out by the end of the session. In the end, we had formed a shooting star, which of course is very bearish signal, but it should be noted that it's sitting on top of massive support. With that in mind, I believe that this market is going to be a bit tough to trade in the near-term, so I'm essentially ignoring it at this moment. However, there is going to come in time very soon that this market should make a significant move, based mainly upon the Federal Reserve and whether or not it decides to taper during the month of September or October off of its quantitative easing program.
I personally don't care what they do, but I do recognize the fact that it will have a major effect on not only the oil markets, but all markets in general. If the Federal Reserve tapers off of quantitative easing, this will make the value of the US dollar skyrocket, and as a result prices in most commodity markets will fall, this one included. However, if the Federal Reserve chooses not to taper off of quantitative easing, that will get the US dollar absolutely pummeled, which of course will bring the value of most commodities up.
Holding pattern until the Fed speaks
Truthfully, I don't think that this market goes very far in either direction until the Federal Reserve decides what it wants to do. At this moment time, there is far too little in the way of volume and "smart money", to think that this market is going to make some significant move in either direction.
With that being said, I am very suspicious of any moves over the next couple of weeks, and will be very careful about taking trades. Right now, I see nothing in this chart that makes me want to risk my trading capital on the direction of the WTI markets as there are cases to be made for both directions at the moment.
