The light sweet crude oil market fell a bit on Tuesday, from overstretched areas. This is a market that will remain choppy, as random headlines are moving it.
Crude Oil
The light sweet crude oil market has fallen a bit during the trading session on Tuesday but it looks like the $100 level underneath is a large round psychologically significant figure that will open up the possibility of a short-term floor.
All things being equal, this is a market that I think continues to be one that probably has more buyers than sellers as far as real momentum is concerned and I do believe this is a situation where if we were to break down below the $100 level it could open up a drop down to the 50-day EMA.
The market rallying from here could send the crude oil market to the $110 level. All things being equal, this is a market that unfortunately continues to move on random headlines coming out of the Middle East. But what I do know about this market is that if we pull back from here, we are going to have a higher low. I don't think we drop back down to $55 a barrel.
MARKET RESISTANCE AND SUPPORT LEVELS
The $85 level right now is the absolute floor. If we break down below there, then that probably means something really good has happened in the Middle East. I think at this point in time we're just going to go back and forth.
There is a major resistance barrier above the $115 level that extends to the $120 level, and I don't think we get above there without some type of explosion in serious concern. All things being equal, this is a market that remains noisy, but I think you will find value on dips. I'm especially interested in the $100 region.