WTI Crude Oil market has sold off a bit during the trading session to break down below the $39 level. Ultimately, this is a market that had desperately been looking for some type of momentum, and it looks as if it may finally have found it.
It is to the downside but there is also the 50 day EMA underneath that should continue to offer support as well. With that in mind, I fully anticipate that we will probably see some type of support, but if we were to break down below the 50 day EMA we will more than likely approach the $35 level eventually.
Brent markets were of course behaving the same way, breaking down significantly as well. Ultimately, this is a market that has been stuck in a range and even though we have seen a lot of momentum during the day shift to the downside, I think it is only a matter of time before recover again. Looking at the chart, the 50 day EMA seems to be offering a little bit of support, so I like the idea of perhaps buying this dip.
Longer-term, I think that oil still have to figure out what it wants to do and therefore you can expect more volatility but it is clear that we have quite a bit going on from the technical analysis standpoint to continue causing headaches for traders who are looking for bigger moves. For what it is worth, the Americans seem to be buying crude oil based upon value more than anything else.