The WTI Crude Oil market try to rally slightly during the session but as you can see we remain very weak in this market. With that, I believe that the market should continue to fall, as there simply is nothing to hold the market off. We should drop down to the $90.00 level given enough time, but I also see the potential for the $92.00 level to offer a bit of support also. With that, I think that the move lower it’s probably going to be more of the choppy type, and as a result it’s very likely that this will be one of this trade you can go back and forth to again and again.

I really don’t see much of a chance of buying this market, at least not until we get above the $97.00 level, which would be a major shift in the momentum of the marketplace. Getting above there, I think the market could then go to the $100 level, which is an area that has caused both support and resistance in the marketplace for some time, and should offer quite a bit of selling pressure.

The trend is too strong.

This trend is just simply too strong to try to fight, and this is a great way to lose money by betting against it. This is akin to “catching a falling knife”, which of course is one of the dumbest things you can do is a trader. We would need to see a significantly supportive longer-term candle in order to make it so that I’m comfortable buying. With that, I am essentially “sell only” at this point in time, and will use short-term candles as trading signals since I believe the market will not only be bearish, but be choppy.

When we get to the $90.00 level, I think at that point in time we could see a significant amount of support that could potentially turn the market around. If we somehow get below that level, the absolute floor in this market could collapse and we could go much lower.

Crude Oil 82114

Related Articles
  1. Investing News

    Job Report Brings Fed Rate Hike Into Question

    On Friday, the U.S. Bureau of Labor Statistics released its report on employment situation in the U.S. for the month of August. According to the report, the U.S. added 173,000 jobs, falling short ...
  2. Personal Finance

    Salary Secrets: What Is Considered a Big Raise?

    A 4% or 5% annual jump in pay may not sound huge, but in today’s environment, it actually means you’re faring better than most.
  3. Retirement

    6 Steps to Update or Change Your Will

    Life changes – a new marriage, the birth of a child – can necessitate changes in your will.
  4. Insurance

    What Does It Cost To Raise a Child in America?

    Having a family can be an expensive proposition, but couples who know the numbers can strategize to lower the costs.
  5. Bonds & Fixed Income

    Calculating Yield to Worst

    Yield to worst is the lowest possible yield on a bond that may be called in the future.
  6. Economics

    What Does Vesting Mean?

    Vesting is the process of accruing non-forfeitable rights.
  7. Economics

    Understanding Retail Banking

    Retail banking refers to the mass-marketed, consumer-oriented products and services offered by the local branch of the commercial bank.
  8. Investing Basics

    Explaining Foreign Exchange Risk

    Foreign exchange risk is the chance that an investment’s value will decrease due to changes in currency exchange rates.
  9. Economics

    What Happened at the Fiscal Cliff?

    The fiscal cliff refers to a scenario on December 31, 2012, in which the Bush-era tax cuts were set to expire.
  10. Economics

    Explaining Enterprise Resource Planning

    Enterprise resource planning (ERP) is management software that integrates a business’ essential departments.
  1. Deficit

    The amount by which a resource falls short of a mark, most often ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. ...
  3. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin ...
  4. Market

    A medium allowing buyers and sellers of a specific good or service ...
  5. Sticky Wage Theory

    An economic hypothesis theorizing that pay of employees tends ...
  6. Cost Of Funds

    The interest rate paid by financial institutions for the funds ...
  1. Are dividends considered passive or ordinary income?

    Despite the fact that earning dividends requires no active participation on the part of the shareholder, they do not meet ... Read Full Answer >>
  2. Is dividend income taxable?

    Dividend income is taxable but it is taxed in different ways depending on whether the dividends are qualified or nonqualified. ... Read Full Answer >>
  3. How do dividends affect net asset value (NAV) in mutual funds?

    Distribution of dividends reduces the net asset value (NAV) of mutual fund shares. However, this doesn't mean that fund investors ... Read Full Answer >>
  4. Are mutual funds considered retirement accounts?

    Unlike a 401(k) or Individual Retirement Account (IRA), mutual funds are not classified as retirement accounts. Employers ... Read Full Answer >>
  5. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>
  6. Do mutual funds invest only in stocks?

    Mutual funds invest in stocks, but certain types also invest in government and corporate bonds. Stocks are subject to the ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!