Light Sweet Crude The light sweet crude market initially fell during the course of the week, breaking well below the $30 handle. However, we did end up
Light Sweet Crude
The light sweet crude market initially fell during the course of the week, breaking well below the $30 handle. However, we did end up turning around and forming a hammer which of course is a very bullish sign. This could be the beginning of a significant bounce, but at the end of the day there are far too many reasons to think that oil is going to remain bearish to actually put any real money behind a long position at this point. On a break of the top the hammer, we will more than likely try to reach towards the $40 level, but we believe that the sellers will reenter the market sooner or later. Simply put, the supply is far too strong for demand, so this is essentially looking quite a bit like a “dead cat bounce.”
Brent
Brent markets rally during the course of the week as well, after initially falling. Because of this, it looks like a bounce could be happening in this market as well but it’s difficult to imagine hanging onto any significant position for any real length of time in this market. We look at this chart, only to fools are starting a rush in and trying to “pick the bottom” of the trend as we have absolutely collapsed over the last several months.
Because of the collapse, it keeps us from buying, but it also makes quite a bit of sense that we could see some type of rally. After all, the market can go in one direction forever. We are simply going to wait to see whether or not this market can rally for any significant amount of time, and then sell when the first bearish weekly candle appears as we still believe that this market can go much lower, with $25 being the first target that we have. Quite frankly, it would not surprise us at all to go lower than that as oil markets are simply far too bearish to do anything but fall over the longer term.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.