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Forex pairs in this Article » CRUDEOIL

The WTI Crude Oil markets had a very strong session on Thursday, as the markets closed that the $108 level. The testimony of Federal Reserve Chairman Ben Bernanke suggested in front of Congress that the Federal Reserve wasn't sure whether or not it was going to be able to taper off of quantitative easing in September, and as a result commodities got a little bit of a bid.

That being said, this market looks like it's ready to start another leg higher. It's almost a guarantee at this point time that the $110 level will be attempted. I find this to be a bit disconcerting, but I cannot argue with the technical set this point in time, and recognize that we have support all the way down to $104. That being the case, it is a "buy only" market, but I'm going to focus more on the short term charts now, rather than the daily chart as most opportunities will be for short-term moves at best.

Crude Oil Chart July 19

Parabolic markets almost always end up in tears, don't be the last one out.

When a market is as parabolic as this one, they almost always end poorly for the buyers. That being the case, I think that we will eventually get a nice sell signal, but right now it's obvious that the market can only move in one direction. Eventually, we will run out of buyers though, and it is at this point time where the real money will be made. The move higher is going to be more of a grind than anything else, and there certainly will be a lot of fear involved in it.

I believe the $110 level will bring a significant amount of selling pressure, simply because of the "large round psychologically significant number" aspect of it. I would be more than willing to sell any resistive candles in the general vicinity, but right now I can only assume that the market is going to go to at least that level, if not possibly higher. Using the hourly charts will more than likely be the way I go forward from here.

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