The West Texas Intermediate Crude Oil market found a significant amount of volatility during the trading session on Wednesday as the market has broken down below the $90 level but then turned around to form a slightly supportive candlestick. Because of this, it looks like we are trying to build some type of consolidation area in this general vicinity.
The oil market of course has to keep in mind that there are a lot of things going on at the same time, not the least of which would be OPEC possibly cutting production. If that’s going to be the case, that could be very bullish for oil, but at the same time, we also have to worry about the global economy slowing down, so that does in fact suggest that there may be less demand for crude oil. That is negative for the price and has been reflected on the chart for a while.
Market Awaits Noise
- All of this noise of course is going to continue to cause some headaches for traders, and I think because of this the only thing you can do is pay close attention to your position size.
- This is a market that will continue to be noisy as I’m sure is the one thing that you can probably count on.
- Furthermore, the jobs of her coming out on Friday will give us an idea of what the Federal Reserve is going to do and what the economy is doing. Because of this, I think the next day or 2 will probably be a lot of choppy behavior, perhaps hanging around in the same general vicinity.
It does not take a lot of imagination to suggest that perhaps we are trading in a short-term $7.50 range, from roughly $87.50 to the $95 area. Furthermore, we also have the 50-Day EMA and even the 200-Day EMA coming into the picture. All things being equal, I think we’ve got a scenario where the market is going to continue to be choppy and dangerous to trade. Because of this, we will probably have to wait until we get the jobs number out of the way in order to get a bit of clarity, but even then, I do not expect things to be easy as liquidity picks up quite a bit as we head into September.
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