On the last day of trading four 2013, you can see that the WTI Crude Oil markets had fallen down to the $98.50 level. This area begins a significant amount of support as far as I can tell, and as a result I believe that we will see a supportive candle in the next couple of sessions. Been supportive candle could be a buying opportunity in my opinion, and as a result I will be looking for a hammer or other such type of candle right around the $97 level. That candle should bring plenty of buyers back into this market that I believe has broken to the upside and is in the middle of starting a new trend.
With that being said, I believe that there is significant support below there as well, especially around the $95 handle. That area begins a significant support cluster all the way down to $92, so quite frankly I believe that this market is going to struggle to fall for any significant amount of time.
Nonfarm payroll report
I also believe that the true direction in this market will be amplified when we get the nonfarm payroll report. After all, a lot of what could drive this market higher is based upon demand, and that demand might be reflected in the employment situation in the United States. With that being the case, the nonfarm payroll report and the ADP report will both be very crucial in this marketplace, as oil can certainly rise right along with the US dollar. While many of you typically trade this in the inverse of the US dollar, it has been known to happen that both can rise at the same time. That is when demand is strong, especially out of America.
Between now and then, I would err on the side of caution and have a bullish stance. Right now, I see far too many significant support levels below to start selling this market at any point on this chart. It doesn’t mean things can change, but I believe that the beginning of 2014 is going to be very good to the WTI Crude Oil markets.
