Oil Technical Analysis October 20, 2011

Light Sweet Crude

The CL market fell on Wednesday as traders began to be concerned about global growth yet again. The $90 mark continues to hold this market back, and should keep it in a range bound scenario for the near-term. The bottom seems to be as low as $70, and the top $90. This is a very wide band in this market, and shows just how jittery the market is. In this particular market, we are willing to range trade it. We are at the upper end of the range, so selling is an option – but buying isn’t.

Brent

The Brent markets were pointed out after the Tuesday session as having formed a hammer on the daily chart, but just below the $115 level. We mentioned that a breaking to the up side would be limited because of the massive resistance. The breaking on the bottom end of the candle was in fact a bearish sign, and something we saw during the session. In fact, if we get follow through, it would then be classified as a “hanging man”, which is massively bearish.