The WTI Crude Oil markets fell slightly during the session on Monday, testing the $93 level. However, the area offered support and the market down slightly higher as it did back during the month of November several times. Because of this that I believe the market will struggle to go any lower in the short-term, simply because we are oversold by any metric you choose to use. On top of that, the nonfarm payroll number is coming, and that of course will have a massive effect on the value the US dollar, and potential demand expectations out of this market.
The shape of the candle really isn’t too much to get excited about, but I think if we can break the top of the candle, the market could very easily bounce all the way back to the $96.50 handle. In that general vicinity, I would expect sellers to step back into the marketplace, and begin to really start to press the issue again. If we got above there on a daily close, that would have me rethinking the downtrend altogether.
Sideways action until the nonfarm numbers.
Barring some type of headline, I believe that the action in this market will be relatively calm and sideways until the nonfarm numbers. In fact, I would see if anything we will probably grind a little bit higher, but any type of significant move probably will not be able to be had until we get that important reading. That being said, I feel that this market could provide short-term opportunities, but anything more than that is probably asking a lot out of it.
Ultimately, I believe that the oil markets might be able to rally a bit over the next several sessions, but I am more interested in selling at the moment then buying. After all, the weight of the market is certainly to the downside, and as a result any buying opportunity that presents itself here is probably going to run into a lot of trouble. Options markets might be the way to go, because the choppiness is probably going to be significant, as well as the noise over the next several sessions.
