The volatility in the oil markets continues to see a lot of massive inputs, mainly from Middle East headlines, and of course by extension, the interest rate markets.
The Light Sweet Crude Oil market did gap lower to kick off the trading session on Friday, rallied a bit, gave back a bit, and then rallied again, but now it’s giving back some of those gains as we filled the gap.
There continues to be a lot of volatility around the oil market and that does make a certain amount of sense considering that we’re basically trading on the latest headlines from a handful of elderly gentlemen who run various countries.
Ultimately, it looks like the $100 level in the Light Sweet Crude Oil market is going to offer a little bit of short-term resistance, but unfortunately, we’re heading into the weekend and that means that anything can happen.
Those headlines that come out over the weekend could rattle the markets; maybe they don’t. And that’s the environment that we find ourselves in. It’s not so much about being right or being wrong; it’s about being nimble.
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50-Day EMA
To the downside, we have the 50-day EMA sitting right around the $93.50 level rising and offering dynamic support if we do fall further. To the upside, the $105 level continues to be a bit of a resistance barrier.
Ultimately, I expect to see a lot of back-and-forth choppy and wild behavior on short-term charts, and therefore you need to be very cautious about your position size and recognize that getting too aggressive in this market would be a wonderful way to wreck your account. Be cautious, but at this point, I still think the buyers are probably going to be rewarded quite a bit more than the sellers unless something unexpected happens.
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