The WTI Crude Oil markets fell during the session on Tuesday, to test the $93.50 level again. This is an area that has been supportive over the last several weeks, and as a result it does not surprise me that we continue to see it hold up. With that being said, what I find particularly telling is that the candle from the Monday session is a hammer, which of course suggests that there is a good chance that we see a bounce from here yet again.
Short-term traders will continue to love this market as a grind sideways, but I recognize the fact that eventually something is going to have to give. Looking at the longer-term charts, there is a ton of support below the current area that we are trading in, and as a result I find it very difficult to short this market, even though it has been beat up so drastically.
Possible bounce.
There could be a possible bounce getting ready to happen in this marketplace, and this could simply be what is known as the "accumulation phase." If that's the case, the so-called "smart money" is starting to buy into this market. It's a bit difficult to tell though, because this is a market that's dealing with whether or not the Federal Reserve is going to taper, which of course has nothing to do with oil itself. In fact, the Federal Reserve is pretty much driving all of the markets at the moment.
If we did managed to break above the $96 level on a daily close, I feel this market could go as high as $98.50 without too many issues. However, getting above that area would be a bit more difficult. All things being equal though, if we did get above the $98.50 level, I feel the $101 would be targeted next. On the downside, it's just going to be so difficult to sell this market because her so much support all the way down to the $90 handle, that I will more than likely just ignore any type of selloff, as I certainly wouldn't be confident going against that noise.
