The WTI Crude Oil markets initially tried to rally during the session on Wednesday, testing the $98.00 level and finding a significant amount of resistance. However, the market turned back around and then fell slightly below the $97.00 level, an area that I anticipate should be rather supportive. Unfortunately, we did not getting close far enough below the $97.00 level for me to be confident in selling this market, so I think at this point we just simply have a weak market that simply doesn’t know what to do at the moment.

I believe that ultimately the $95 level below will be massively supportive as well, so I would expect a bounce sooner or later, simply because we are certainly in the oversold condition at the moment. If we can get a bounce, I believe the $99 level will be targeted first, then the $100 level, and then possibly the $105 level if we can get that strong. However, right now there isn’t that much in this marketplace and looks that strong, so that could be a bit of a tall order.

US dollar could be an influence as well.

The value the US dollar could be influencing this market as well, as it continues to strengthen against almost everything else. However, the US Dollar Index formed a massive shooting star for the day, which of course means that perhaps will get a little bit of a pullback in the value the US dollar overall. Nonetheless though, I do believe that the US dollar will continue to strengthen over the longer-term, and that could be very bad news for the oil markets as they are of course priced in that particular currency, and the inverse correlation typically holds over long periods of time.

If we break down below the $95 level, I think we could see a little bit of a panic in this market, as we would head straight to the $90 handle. Ultimately though, oil traders do like to go along as often as possible, so I really do think that we will have some type of stabilizing effect relatively soon. At this moment though, I don’t see any reason to be involved.

Crude Oil 8714

Related Articles
  1. Budgeting

    Is Living in Europe Cheaper than in America?

    Learn how living in Europe has financial advantages over living in the United States. Discover the benefits to take advantage of when it makes financial sense.
  2. Investing

    Buy Stocks Now? Nope. Here’s Why

    Hedgeye Senior Macro analyst Darius Dale explains the fallacy of Wall Street’s S&P 500 year-end targets.
  3. Retirement

    Top 5 Cities To Retire To In Croatia

    Cheaper than the Italian coast along the Adriatic Sea, but full of natural beauty, good food and active sports.
  4. Home & Auto

    The Latest Airbag Recalls: What to Do

    The latest warnings are from Honda/Acura and Dodge. How to look up your car – and what to do if you find it on the recall list.
  5. Term

    How Traditional IRAs Work

    A traditional IRA is a tax-advantaged retirement account that includes stocks, bonds, mutual funds and other investments.
  6. Mutual Funds & ETFs

    The Top 5 Large Cap Core ETFs for 2016 (VUG, SPLV)

    Look out for these five ETFs in 2016, and learn why investors should closely watch how the Federal Reserve moves heading into the new year.
  7. Term

    The History and Purpose of TQM

    Total quality management explores processes to enhance quality and productivity.
  8. Economics

    Does Big Money Hurt or Help Clinton and Rubio?

    Marco Rubio and Hillary Clinton lead their parties in raising money from Wall Street. Is that a help or a hindrance?
  9. Term

    How Market Segments Work

    A market segment is a group of people who share similar qualities.
  10. Credit & Loans

    Don't Get Overcharged for Your Mortgage

    Don't pay more for a mortgage than necessary. Here’s a quick look at the different categories and how to be sure you're getting the best deal.
  1. What is arbitrage?

    Arbitrage is basically buying in one market and simultaneously selling in another, profiting from a temporary difference. ... Read Full Answer >>
  2. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  3. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  4. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  5. What items are considered liquid assets?

    A liquid asset is cash on hand or an asset that can be readily converted to cash. An asset that can readily be converted ... Read Full Answer >>
  6. What is comparative advantage?

    Comparative advantage is an economic law that demonstrates the ways in which protectionism (mercantilism, at the time it ... Read Full Answer >>
Trading Center