The WTI Crude Oil market rose during the session on Tuesday, and at one point in time even managed to break above the $94.00 handle. However, we ended up finding a bit of resistance of their and pulling back to form a shooting star. Is because of this that the market looks as if it is not quite ready to break out yet, and that we will more than likely continue to consolidate. If we managed to break down below the $92.50 level, I feel at that point it would be possible to start shorting again. Until we get below there, I really don’t see the ability to sell this market as we have fallen so far.
On the other hand, if we break above the $94.50 level, I believe that the market will then head to the $97.00 level, which of course is the beginning of a relatively impressive consolidation area. That area been broken to the upside probably has us looking at the $98.50 level next. However, I think regardless of which direction we go, the market should continue to be very choppy as there are a lot of geopolitical issues out there that could move the oil markets in general.
This is a market that at best can be described as dangerous. After all, you can see that the moves have been very violent, as the candle from last week when all the way to the $97.00 level and turned completely around to close near $93.00 level by the end of the day. That shows how volatile and dangerous these markets can be, and the fact that we are in the last week of August certainly will not help as far as liquidity is concerned. With that in mind, I am very hesitant to jump directly into this market, and will be using options to express my opinion. Right now, I really don’t have one as I believe the market isn’t ready to go anywhere in the near term. With that, I have my eye on the market, but am not ready to make a move yet.