Looking at the light sweet crude market for the Monday session, one cannot help but notice the fact that the $85 level has held as resistance. It's an obvious spot for this to happen, but by the end of the day the market had push prices back up in order to form a bit of a hammer. This sets up an interesting trade for Tuesday, as a break below the bottom of the hammer would be an extremely bearish signal, especially if we were to make new lows. However, a break of the high from the Monday session would have this market seriously testing the resistance between $85 and $86. If that can be overcome on a daily close, we would be more than willing to buy as it would be very bullish sign for the crude oil markets and would open the door to the $90 level.
Click here a current Crude Oil Chart.
Originally posted here