The biggest problem is that we have a lot of conflicting issues at the same time, as the market is likely to see the lack of supply is a major boost, but at the same time, there is a huge lack of demand.
- The West Texas Intermediate Crude Oil market has done very little for the last several weeks, bouncing around in the same area that we have been in for a while.
- The session on Wednesday did nothing to change that attitude, and now it looks like we are going to continue to see a lot of back-and-forth trading.
- That being said, there is a lot of money to be made if you can stay nimble and trade short-term charts.
When I look at this chart, it’s worth noting that the 200-Day EMA is at the top of the rectangle that we have been looking at, but we also have the 50-Day EMA sitting right in the middle of this box. We recently made a bit of a “double top”, sitting right around the $93.50 level. At this point, the support level seems to be nearly $82.50 level, and therefore I think it’s worth paying close attention to that level as well.
Wait for a Big Move
The biggest problem is that we have a lot of conflicting issues at the same time, as the market is likely to see the lack of supply is a major boost, but at the same time, there is a huge lack of demand. In other words, it’s all confusion. If the economy is in fact going to slow down around the world, that also makes a huge argument for lowering prices. A breakdown below the $80 level could send this market much lower, but I don’t necessarily think that is going to be easy to achieve at this point.
On the other hand, if the market were to take out the top of the double top above, then it opens up the possibility of a move to the $100 level. The $100 level course is a large, round, psychologically significant figure, and it will attract a lot of traders for profit targeting, and possibly even options play. At this point, I think the market is just going to bounce around in this area and I think it’s difficult to imagine a scenario of why or where we would break out, but if we do get out of this box, you have to pay close attention to this market because it could really start to make a bigger move at that point.