- The West Texas Intermediate Crude Oil market did very little during the trading session on Friday, as we have seen a bit of non-volatile trading for a couple of days in a row.
- It’s interesting that we are seeing it right here, because it looks like we are at the top of short-term consolidation range.
- After all, the market will then possibly see a little bit of selling pressure, and therefore it’s likely that we will continue to see the range play out.
Keep in mind that a lot of people are hanging around the markets and either focusing on the fact that OPEC has cut production by 2 million barrels a day or focusing on the fact that the global economy is slowing down. At this point, it looks like there’s a lot of confusion due to both of those things at the same time, and therefore I think it does make a lot of sense that we continue to see more sideways action than anything else.
Waiting for a Bottom
However, it’s also worth noting that we recently broke through a trendline, and our focus is on going sideways. This is the beginning of a potential trend change, but we are not there yet, so if we were to turn around and break above the 200-Day EMA, then it’s likely we go much higher.
On the other hand, if we were to turn around and drop below the $82.50 level, then we will probably start to look toward the $80 level, and then possibly even lower than that. If we do get that move, then it’s likely that we will see a lot of negative pressure. Keep in mind that crude oil is a situation right now where it is trying to figure out whether people are going to continue to see global growth, or if we are going to see a situation where there’s just not enough demand because everything is slowing down. The next couple of weeks could be crucial, as we are trying to figure out whether the market has finally bottomed, or if it’s just a pause on a much lower move. In the short term, if you could trade back and forth, that might be the way to go on shorter time frames.
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