A bit of patience will probably be needed before we start putting any serious amount of money into the market.
The West Texas Intermediate Crude Oil market initially pulled back on Tuesday but turned around to continue the overall bouncing that we have seen over the last couple of months. That being said, the 50 Day EMA has been broken above during the trading session again, so it suggests that we are trying to build up enough inertia to finally break out of this massive triangle.
The $100 level seems to be an area of intense interest, and I think that will continue to be the case. If we were to break down below the candlestick from the Monday session, that could kick off quite a bit of selling, perhaps opening up the possibility of a move to the $95 level, followed by the $90 level. The $90 level is backed up by the 200-day EMA which is currently sitting just above the $85 level. Nonetheless, I think if we break down below this uptrend line, it could be the first shot across the bow when it comes to the overall trend.
On the upside, if we were to break above the $105 level, then it is likely that we are going to go looking toward the $110 level above. Breaking above that then would kick off the rest of this trend to the upside and perhaps even much higher pricing. At this point, we are trying to figure out whether or not we are going to see more bullish pressure, or if we are going to see demand destruction enter the psyche of traders around the world. If that happens, we could see oil get absolutely crushed, but I think it is probably going to take quite a bit of effort to break out of this area in general. As long as that is going to be the case, I think we will probably go back and forth and try to figure out where the next big move is. At this point, it is difficult to see where that is going to be but once we break out of this triangle, I think you will get quite a bit more clarity. Because of this, a bit of patience will probably be needed before we start putting any serious amount of money into the market.