The West Texas Crude (WTI) Oil market has broken down below the $36.25 level again, and it now looks like we are going to threaten the $35 level. If we break down below the $35 level, it is likely that we go much lower, perhaps reaching down towards the $32.50 level, and then possibly the $30 level.
With that being the case, I do like the idea of shorting this market on short-term rallies that show signs of exhaustion. At this point time, the $30 level is my longer-term target, but I think it is can it take a while to get there. After all, it seems as if hope burns eternal, and at this point I think we have a bit of a lid on the market above at the 50 day EMA.
Brent markets tried to rally initially during the trading session on Friday, but then broke down again to reach towards the bottom of the candlestick from the Thursday session. At this point time, the market looks like it is going to continue to struggle due to the fact that we have no demand out there, and it looks like we are ready to go down towards the $35 level, possibly even the $30 level.
After all, if the European Union is going to shut itself down it is hard to imagine a scenario where we suddenly take off as far as demand or value is concerned. Furthermore, the US dollar is also starting to strengthen as well, which of course is what this commodity is priced in. With that, I am a seller of short-term rallies.