The West Texas Intermediate Crude Oil market continues to see a lot of a sideways grind, as the market has been noisy to say the least. Because of this, I suspect it is probably only a matter of time before we have to make a more explosive decision, but right now it looks as if the market is focusing on competing headlines. There is the headline that OPEC has decided to cut 2 million barrels per day, and then of course there’s a lot of concern about global demand slumping. Furthermore, the Americans are releasing significant amounts of oil from the Strategic Petroleum Reserve, and in this environment the only thing that you can have is a certain amount of chaos.
It’s probably worth noting that we are hanging around the psychologically significant $85 level, which seems to be acting as a bit of a magnet for price at the moment.I think given enough time, we will probably see this market have to break out of this range, but in the short term you are going to be better off trading something like the 15 minute chart, and scalping positions back and forth.What the market is waiting on remains to be seen, but at this point it just seems like it’s exhausted and nobody really knows what to do.
The 50-Day EMA above offers a significant amount of resistance, while the $82.50 level underneath offers a significant amount of support. I think we stay in that same basic range for a while, as the market determines where it wants to go longer term.
Look for some type of impulsive daily candlestick to give you the idea as to what the direction will be next, and clearly it is worth noting that we had broken out of the down trending channel, but now we are just simply hanging around the top of it. In other words, I think the channel has been negated, but not necessarily the trend, at least not yet. If we do continue to see significant lack of volatility, this could be a long couple of weeks but obviously there will be momentum one way or the other, perhaps during the Federal Reserve meeting early November, because it could give us an idea as to what monetary policy is going to continue to be like.