The WTI Crude Oil markets had a positive showing on Thursday, piercing the $99.00 level. This of course shows that the market still has some bullish intentions, but the fact that we gave back over half of the gains has me a bit concerned. Also, you have to keep in mind that we are at the end of the year, and there’s the possibility that we simply do not have the liquidity to pushes market much higher. However, I think that the markets will eventually hit the $101 level, analysis the question of whether or not it’s the next couple of days, or if it’s in the year 2014.
As far as I can tell, the $96 level should be the absolute bottom of the market right now, and quite frankly I think $97 has a potential to be the bottom as well. I would look for supportive candle’s below in order to buy and possibly take advantage of the choppiness of this market as well as the range bound attitude.
Federal Reserve looks to taper, which means two possible things.
The Federal Reserve looks to pull back off of the bond buyback program, which of course is 0bullish for the US dollar. While that could drive down the value of commodities in general, not to mention the WTI markets, the fact is that the central bank being willing to pull back a little bit of quantitative easing suggests that perhaps the economy in the United States is doing a little better than anticipated. This could end up being good for demand as far as the oil markets are concerned, which of course is bullish. So we have to conflicting forces at the moment, a rising US dollar, and possible rising demand. With that in mind, you can rest assured that this market will continue to be very choppy.
In the meantime, I think short-term traders will continue to benefit trading this market, at least until the end of the New Year’s holiday. Between now and then, expect a lot of noise.
