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The WTI Crude Oil market had a fairly negative session originally on Tuesday, but as you can see bounced hard enough to form a hammer for the session. The candle suggests that we are going to see a bit of buying pressure in this general vicinity, and as a result I feel that this market will more than likely make a serious attempt to reach the $110 level in the short term. As far as selling is concerned, it's obvious that we are going to have a lot of problems getting below this general vicinity, and because of that I feel that the bearishness that we have seen over the last couple of days did in fact not work out. Because of that, I am grateful that I traded with options and nothing more. I took a small loss on that position, but well within tolerance.

The biggest problem now is that we are just simply so bullish that it makes me nervous overall. I think there is a short-term buying opportunity on a break of the highest from the session on Tuesday, but those who hang onto this market are going to learn a real lesson in pain if they are careful. That being said, I think that perhaps the next two or three dollars will be to the upside.

Crude Oil Price July 24

$110 is a large round psychologically significant number

The $110 level is a large round psychologically significant number, which of course always brings sellers. That being the case, I think that the market will head towards that area and then pullback. Whether or not we can get above that area in the end will become the question, which will more than likely revolve around what the Federal Reserve is expected to do in September. After all, there was a lot of chatter about the possibility of "tapering off" of quantitative easing. This made the US dollar much stronger, which of course works against the value of crude oil. However, if they do not taper off, it should weaken the US dollar, which should only propel this market even higher.

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