The West Texas Intermediate Crude Oil market has gone back and forth during the trading session on Friday, as we continue to see a lot of confusion in financial markets overall. After all, oil is the lifeblood of the markets, so therefore it does make quite a bit of sense that we would see a neutral candlestick as there are so many questions.
- The $87 level underneath has been short-term support, while the $94 level above has been resistance.
- The 50 Day EMA is starting to drop at this point, and perhaps reach the 200 Day EMA.
- We are getting relatively close to a “death cross”, which is a very negative situation, and could send algorithmic traders to the downside.
The market has been drifting lower for a while, and now that we are hanging around this consolidation area, it is worth noting that you could make out a little bit of a falling wedge here, so we might get a bounce. Any rally at this point in time is probably short-lived though, perhaps allowing just a bit of a move toward the $100 level.
Crude oil forecast for today
One thing that you need to keep in mind is that there is a lot of concern when it comes to global demand, as we are starting to see economies slow down. Furthermore, we also have to keep in mind that the US dollar has been strengthening, and that means it’ll take less of those dollars to buy oil, all things being equal. The market is more likely than not going to have more of a “fade the rally” type of situation, or perhaps just a breakdown below the recent support that allows oil to drop down to the $80 level over the next several weeks.
It’s not until we break above the $100 level on a daily chart that I would consider going long in this market, but I think it would take a significant amount of upward momentum and strength to get there. I just don’t see how that plays out, but you always have to have the other hypothesis in the back of your head, even if it goes against almost everything that you know or see. That being said, until we break above there, I’m looking at rallies as an opportunity to get short again.
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