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Light Sweet Crude
CL fell on Wednesday as traders reacted to the $85 resistance area that we suggested could cause trouble. The global fears of a slowdown continue to haunt the markets, and as such – this market could be prone to violent movements. The oil markets are effectively a scalper’s market now, and longer-term positions are going to be hard to come by. The market looks weak, so we are not willing to buy at this point. We can’t sell yet; we need to see a sustained move below $80 to be convinced. In the meantime, we are sitting still.
There is a long-held belief in this market that the floor is set at $100. It appears that we are about to find out, as the bounce from Monday has all but vanished already. The market is looking weaker and weaker, and we cannot buy at this point. However, $100 is too close to think that selling is the proper thing to do either. Because of this – we are flat of this market unless we see a daily close below the $100 mark.