The WTI Crude Oil markets fell initially during the session on Friday, but found in support of the $101 level to turn things back around. With that being said, we ended up forming a hammer, which of course is a very positive sign. With that hammer, it looks to me like the $101 level will be a bit of floor in this market, but ultimately I believe that the trend will continue in its choppy manner that we’ve seen over the last several months. On a break in the top of this hammer, I would be long of this particular contract via the CFD markets if possible, or perhaps using binary options.

The reason that I suggest avoiding the futures contract is that the volatility that we see in the markets presently will make this a dangerous futures contract to be involved in, and quite frankly the lack of granularity will not suit most retail traders. With that, it’s a most impossible to recommend the futures contract unless of course you have the correct sized trading account.

Nonetheless, I am bullish in this market over the longer term but I also recognize that we are in the middle of the summer, with the norm being fairly quiet choppiness. I think of this more or less as a slightly bullish market and as you can see we have gradually been going higher, but have seen violent pullbacks and shots higher.

Watch the headlines and US dollar.

I believe the launching the headlines coming out of the Middle East will be vital, as well as the headlines coming out of Russia itself. Remember, Russia is a major exporter of oil, but at the end of the day is a different grade. Nonetheless, it can bring in more demand for other grades as refineries switch. Regardless, my suggestion is to simply avoid tying up more margin than necessary, hence the idea of the contract for different markets, or in the Americas the binaries such as in the NADEX. Ultimately, I don’t really have an argument for selling this contract until we get below the $99 level, which in my opinion would show a severe breach of support.

Crude Oil 72814

Related Articles
  1. Stock Analysis

    How Yelp Adds Value to Local Businesses

    Understand how the Yelp platform operates and how it adds value to the business world. Learn about the top five ways Yelp helps small businesses.
  2. Stock Analysis

    Top 4 Companies Owned by Yahoo

    Understand Yahoo's acquisition strategies and how the company has been able to make so many acquisitions. Learn about the top companies owned by Yahoo.
  3. Economics

    The Effect of Fed Fund Rate Hikes on Gold

    Explore the historical relationship between interest rate increases and the price of gold, and consider what effect a fed funds rate hike might have on gold.
  4. Stock Analysis

    YouTube Vs. Vimeo: Which One Should You Choose?

    Understand why online videos have become popular and how platforms are capitalizing on the trend. Learn about the differences between YouTube and Vimeo.
  5. Fundamental Analysis

    The Basics Of Corporate Structure

    CEOs, CFOs, presidents and vice presidents: learn how to tell the difference.
  6. Investing

    The ABCs of Bond ETF Distributions

    How do bond exchange traded fund (ETF) distributions work? It’s a question I get a lot. First, let’s explain what we mean by distributions.
  7. Investing

    Latin America’s Economic Forecast

    After a ten-year run, the economies of Latin America are in a decline. For sustainable, long-term growth, the region needs structural reforms.
  8. Professionals

    Illiquid Real Estate: Correlation Pros and Cons

    Stock and bond markets are moving more closely in tandem with each other. Is illiquid real estate the vaccine for this correlation?
  9. Professionals

    How to Manage Fixed Income as Interest Rates Rise

    A look at how to manage fixed income amid the specter of rising rates, correlation to stocks, client expectations and more.
  10. Mutual Funds & ETFs

    4 Mutual Funds Warren Buffet Would Buy

    Learn about four mutual funds Warren Buffett would invest and recommend to his trustee, and discover detailed analysis of these mutual funds.
  1. Does working capital measure liquidity?

    Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>
  2. Can working capital be negative?

    Working capital can be negative if a company's current assets are less than its current liabilities. Working capital is calculated ... Read Full Answer >>
  3. How do hedge funds use equity options?

    With the growth in the size and number of hedge funds over the past decade, the interest in how these funds go about generating ... Read Full Answer >>
  4. Are Cafeteria plans taxable?

    Whether the benefits you receive through your employer-sponsored cafeteria plan are taxable depends entirely on which benefits ... Read Full Answer >>
  5. Can mutual funds only hold stocks?

    There are some types of mutual funds, called stock funds or equity funds, which hold only stocks. However, there are a number ... Read Full Answer >>
  6. How do mutual funds compound interest?

    The magic of compound interest can be summed up as the concept of interest making interest. On the other hand, simple interest ... 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!