The WTI Crude Oil markets fell during the session on Wednesday, losing quite a bit and testing the $96.50 level. This market of course has been very bearish recently, so I am a bit hesitant to sell down here even though it certainly looks like it wants to fall. After all, the $96 level looks to be rather supportive, and there is a significant amount of support below that area. Quite frankly, I did miss the downfall below the $100 level, and now I have to sit and wait to see what the markets are about to do. This market looks like it could find plenty of support in this general vicinity, but I do not think that it's going to happen quickly because of the significance of the fall.
Going forward, I do expect to see the $100 level tested again, but I don't expect to see it tested in the next couple of days. I think a little bit of sideways consolidation is probably on, and as a result it's going to be a little bit difficult to trade this market for anything other than a short-term scalp of the next few sessions.
Supply and demand, US dollar value.
Supply and demand of course always comes into the equation when you're talking about the commodities market, and right now one has to wonder how much demand is out there considering that the jobs numbers out of United States has been rather poor. Because of this, it's very likely this market could remain a bit soft, but the question comes into play as to whether or not the Federal Reserve can taper off of quantitative easing. If they cannot, and I don't think they can, it's very likely that the value the US dollar will fall over the longer term, and that in turn should provide a lift to "stuff", such as oil, gold, and other commodities. It's really going to come down to whether or not the markets are focusing on the value the dollar, or the possibility of weaker industrial demand.
