The WTI Crude Oil markets initially rose during the session on Wednesday, but as you can see we pullback and fell all the way down to the $99.50 region. With that, the $99 level appears to be the support that we are fighting at the moment. If we can get below there, I believe that this market really search to fall apart with its first stop been at the $97 level, and then the $95 level shortly after that.
However, I think that one of the things that may keep this market fairly quiet today is the fact that tomorrow is nonfarm payroll. After all, that announcement affects all markets, so a lot of traders will probably simply stay on the sidelines, and as a result a slight bounce wouldn’t be that big of a surprise to me. Nonetheless, I find it almost impossible to take some type of position ahead of that announcement, as I think it’s going to be far too important.
I recognize the magnitude of the area.
I recognize the magnitude of the area at the moment, so a breakdown below here of course does pique my interest. However I also have to admit that the market closing at the bottom of the range for the session looks very negative also, so this is one of those times when the market is fairly confusing to me. After all, we got a pretty negative move during the day, and I believe that has to do with the US dollar gaining strength as the GDP numbers came out much stronger than anticipated. The knock on effect out of the Forex markets with the US dollar strengthening made this market fall in my opinion, simply because it takes less of those US dollars to buy a barrel of oil.
However, I have to wonder whether or not the buyers are going to come in somewhere in this area as a stronger GDP number out of the United States should bring demand for oil up. I think once the job numbers come out, we will be able to see the market in its cleanest form. Until then, I think this is a very noisy market and quite frankly don’t feel comfortable taking the risk.