The WTI Crude Oil markets fell during the session on Friday, crashing through the $90.00 level. The $90.00 level is an area that of course would attract quite a bit of support and buying, but that being the case the market does in fact look like it’s ready to go lower. Looking at this marketplace, you can see that the Thursday session offered a hammer, going all the way down to the $80.00 level. With that, it appears that the market will struggle to go lower, but I do think that eventually we do break down. A move below the $88 level would be the signal to start selling, but that being the case, I believe that selling rallies will probably be the easiest way to trade this market.
Downtrend is too strong to fight.
The downtrend is far too strong to fight at this point in time. Because of this, I have absolutely no in buying this market. In fact, it is not until we break above the $96.00 level that I would be even considering buying this market. I believe all the way between here and there though, we could see bearish candles that offer selling opportunities. I would prefer to sell rallies than to buy some type of break down, simply because it is essentially getting the US dollar “on sale.” Remember, even though this is a commodity market, you have to essentially think of it as a Forex pair in the sense that it is WTI/USD that you are trading.
If we did break down below the $88 level though, we could go as low as the $85 level. That is a significant support barrier, and as a result we think that the market will be attracted to it. Ultimately, the market will drift down to that level, the question is whether or not we go higher first. I believe that eventually this market will find massive support below, based upon value as far as oil is concerned, but at this point in time the US dollars simply the strongest asset out there.
