- In my daily analysis of commodities, it’s worth noting that the West Texas Intermediate Crude Oil market has initially shown a certain amount of strength, only to turn around and fall apart.
- Because of this, I think you get a situation where we are still trying to sort out where we are going for the longer-term, and it’s probably worth noting that we had recently seen a shot higher, meaning that a little bit of profit-taking may be going on.
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Technical Analysis
It’s probably worth noting that the technical analysis for this market is still relatively negative, despite the fact that we had seen a lot of bullish pressure over the previous couple of sessions.
Underneath the current trading, we have the $66.50 level offering a certain amount of support, and I think that could be a short-term “bottom then the market”, as it has been one for 2 years. At this point, I would be a bit surprised to see this market breakdown below that level, but if it does, that would obviously be a very negative turn of events.
On the other hand, if we can turn around a break above the 50 Day EMA, where we had pulled back from during the day on Friday, then we will challenge the $72.50 level, which of course is an area that a lot of people will be paying attention to as it has been important multiple times in the past. If we can break above there, then the market really could start to take off to the upside in trying to get to the $75 level.
That being said, keep in mind that this is a market that is highly sensitive to the global economy, and of course whether or not economic activity is going to continue to pick up, or if it is going to slow down. After all, crude oils essentially thought of as the “life’s blood” of the global economy overall.
This chart tells me that we are looking for a bottom, but we just don’t know which direction to go at the moment.
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