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Forex pairs in this Article » CRUDEOIL

The WTI Crude Oil markets fell during the session on Monday, confirming the shooting star that we had seen printed on Friday. However, it is a bit difficult to short this market right now because it has been so bullish. Making it even more difficult is the fact that there is a significant amount of support just below at the $105 level, so I have been looking at this market based upon the options market, not contracts in the futures market. It allows you to put a limit on your losses fairly easy, and they are certainly cheaper than playing the actual futures contract itself.

That being said, I do think that this market has gone too far too quick. But until we get below the 105 level, is very difficult to imagine a scenario where this market really breaks down, but if it does, it should hit the $100 level.

Crude OIl Price July 23

Expect more choppiness

I expect more choppiness in this market, it's quite frankly driven upon the value of the US dollar, and headlines around the world. Truth be known, I do not like this market overall but there is a certain amount of bullishness that we have seen recently that is hard to argue with. Going forward, I fully expect to see a lot of headlines throwing this market around like a rag doll, as well as technical areas that could cause a lot of choppiness. Quite frankly, if you are not an experienced trader you may want to avoid this market at least until the large traders come back in September.

The liquidity is going to be a bit strained at this point time, so there is the possibility that the moves have been a bit exaggerated as well. Nonetheless, I think this market does have an underlying bid in it somewhere around the $105 level, so until that's broken down it's really a market that can be very difficult to play. This again is a reason to be playing options, and not the straight market itself. An alternative of course would be the CFD markets, because at least in that market you can play very small and granular position sizes.

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