The WTI Crude Oil markets did very little during the session on Monday as traders came back from the weekend. It appears that the market is essentially settling at the $60 level, and as a result there isn’t much to do. I still believe that this market will eventually break out to the upside, but the recent breakout needs consolidating in order for this market to build up enough momentum to continue going higher. In the meantime, I will simply watch this market and perhaps consider buying short-term pullbacks.
Once we get above the $63 level, I feel that the market can then head towards the $68 level, followed very shortly by the $70 level. With that, I feel that it’s only a matter of time before the buyers step back into this marketplace, and of course the US dollar falling in value doesn’t exactly work against the value of crude oil either.
Buying dips
I believe that buying short-term dips will be the way to go going forward, and that longer-term trades are going to be very difficult to hang onto, at least not until we get above the $63 level. Once we do, it’s very likely that the marketplace will offer us a nice long-term buying opportunity but it’s going to be a marketplace that will be highly volatile, just simply because the markets don’t have much in the way to digest at the moment. I believe that a lot of this comes down to US dollar weakness more than anything else. It is also because of that reason that I believe this market won’t be extraordinarily bullish. It isn’t necessarily based on demand, rather a repricing of global risk appetite and the idea of value in the commodity sector.
I believe that is longest we can stay above the $53 level, we should see this market grind its way into a longer-term uptrend. Because of that, I don’t really have a scenario in which I am wanting to sell this market at the moment, so therefore I am essentially “buy only” at this point.
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