The WTI Crude Oil markets fell during the session on Tuesday, sending the market well below the $95 level, showing that the market is continuing to show weakness overall. That being the case, look sick the oil markets may still have a little bit of selling pressure attached to them, but in the end we have to wonder how much support there is below here, and as a result I am a bit hesitant to sell this market at this point in time. However, I think there is going to be a massive bounce coming relatively soon. It really comes down to whether or not we can break down below the $93 handle, which could be a short-term selling signal for short-term traders.
If we do get some type of supportive candle, buying in this general vicinity could produce a nice bounce all the way up to the $95 handle, possibly even as high as the $98.50 level. In the end though, I believe that this market will more than likely be sold off again, and as a result I would not hesitate to use this attitude in order to sell on resistive candles. To be honest, that is by far the most comfortable trade I see coming.
Federal Reserve
The Federal Reserve will continue to be in focus by traders, as they try to discern whether or not the US dollar will go up or down. Because of this, you have to keep an eye on announcements and headlines coming out of the Federal Reserve, and hints as to whether or not the central bank can go ahead and taper off of quantitative easing. If they can, this should bring up the value of the US dollar, and send prices of commodities down in general. However, if they cannot, sooner or later we may see the US dollar selloff, and that could give us the ability to see the markets rise over time as it will take more of those US dollars in order to buy oil. No matter what, expect choppy trading.
