- On Thursday, we saw the West Texas Intermediate Crude Oil market rally a bit, although we are still in a very touchy market.
- Ultimately, this is a market that I think continues to see a lot of questions asked of demand, especially as supply is being flooded.
- However, there has been some murmuring about tariffs on certain ships in the Middle East, so that could threaten a little bit of supply.
Nonetheless, supply is still being produced hand over fist by OPEC, the United States, and Russia. Ultimately, this is a market that I think continues to see a lot of volatility, and I think that the $65 level above should end up being a fairly significant ceiling. The 50 Day EMA sits right around there as well, so I think that’s about as far as the market is likely to go without some type of external factor driving things wild.
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Technical Analysis
The technical analysis continues to be quite negative, despite the fact that we have seen a lot of strength over the last couple of days. Ultimately, even if we were to rally all be looking for signs of exhaustion that I can start shorting again, as not only do we have a flood of crude oil in the storage tanks, but we also have a lot of questions of what happens next with the global economy. After all, crude oil is a major factor when it comes to what happens next economically, so it of course will go higher or lower based on what traders think that the global economy will do.
Ultimately, this is a market that I still prefer to “fade the rallies”, but I also recognize that if we were to break above the $65 level, then it opens up the possibility of a move to the upside toward the 200 Day EMA, but I don’t think that is likely to happen. If we break down from here, the $62 level will more likely than not end up being a bit of a short-term floor.
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