- During the early part of the Wednesday session, we saw the Light Sweet Crude Oil market fall pretty significantly, but we have also seen quite a bit of support, especially near the $66 level.
- That’s an area where we have seen a lot of action in the past, as it was a previous resistance barrier.
- If we can continue to go higher from here, that would be a sign that the market is still somewhat bullish, and I think a lot of people would be looking to get involved. With this being the case, you have a situation where market participants are probably looking for a reason to start buying again.
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This is the season where crude oil typically does fairly well, and I think a lot of traders are cognizant of this. Ultimately, this is a market that I think will continue to be very noisy, but at the end of the day, we have to determine whether or not there is going to be increased demand. The Federal Reserve isn’t going to be cutting rates anytime soon, so we won’t have that tailwind, but at the same time, the US economy is doing fairly well, which will continue to bode well for the idea of crude oil demand coming out of America. The shape of the candlestick is a hammer of course, and that in and of itself might attract some traders. I believe ultimately this is a market that traders will continue to pay close attention to, because it is such a major leading indicator of how the economy is faring. You should also keep in mind that there are a lot of concerns right now about conflict in the Middle East, so that could of course come into the picture as well.
If we were to break down below the $65 level, then I think that this market could drop a couple of dollars rather rapidly, perhaps aiming toward the $62.50 level. On the upside, if we can break above the 200 Day EMA, then it’s likely that the market will probably go looking toward the crucial $70 level above.
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