The WTI Crude oil markets initially fell during the course of the session on Monday, but as you can see we are still stuck just above the $58 level. With that being the case, the market looks as if it is trying to build up a little bit of momentum to go higher. After all, the move above the $50 level was significant in its bullishness, and as a result I have no interest in selling until we get well below that level. I think that we are now trying to get a little bit of momentum to continue going towards the $68 level, extending all the way to the $70 level.
Obviously, the US dollar has a lot to do with what the oil markets will do, as the market should react to the underlying currency moving. The US Dollar Index has been very strong over the last several months, which of course has pushed the oil markets lower, but at this point in time the US dollar is showing quite a bit of volatility which could lead to a bit of a change in this marketplace one way or the other.
Buying dips
I believe that this market going higher will more than likely happen, but it is probably going to be a very volatile affair. If we do see this market go higher, I think that the dips will continue to be buying opportunities but I also recognize that it’s going to be very difficult to hang onto the streets for any real length of time. Ultimately, I do think that we had the $60 level, and then the $70 level. However, there is also the possibility that I am completely wrong and we break down.
On a break down below the $56 level, I believe that the buyers will admit defeat, and this market will then head to the $50 handle next. It is there where I think that quite a bit of battling will go on as well, and we would have to reevaluate the entire situation.
