The WTI Crude Oil markets initially fell during the session on Wednesday, but bounced back in order to find enough support to form a hammer. This hammer just continues the long line candles that show. This market grinding sideways, and perhaps trying to form some type of base so that we can go higher. After all, the markets have sold off significantly, and as a result I am a bit hesitant to try and sell them down here.
That's not to say that selling isn't possible, it's just that the wind up from a higher level will be the way to go as the oversold bounce that has not come yet certainly seems likely. There is a gap at the $96 level that should offer a bit of resistance, so any resistive candle in that general vicinity. Opens up shorting opportunities for the short-term trader in my opinion. If we can get above there, $98.50 will be the next level that the WTI market struggles with. A resistive candle in that general vicinity is a selling opportunity as well.
How is the global economy doing?
Talking with some colleagues, we have started to think that the oil markets are running more on the demand side of the equation than anything else. After all, with Europe cutting rates in a surprise move last week, it does suggest that perhaps demand will start to shrink globally. If that's the case, that could put a real hurting on demand for commodities in the energy sector, which of course will have a massive effect on this market as well.
On top of that, I feel that this market should continue to be choppy at best, and as a result we will more than likely see this market struggle that have any fluidity to the upside. With that being the case, I am much more comfortable selling at a higher level than I am being bothered down here. If we do break down below the $93.50 level, I think the next move. The market will make is a drop down to the $90 level.
