The Light Sweet Crude markets were just a bit positive for the session on Thursday as the world awaits the results of the Greek elections. If that election were to go with the anti-austerity parties, this would more than likely lead to a slowdown, and this could drive down demand for oil even further.
The $80 level below still looks a bit like a "line in the sand" for the bulls, and it is underneath that level that we find one of the possible sell scenarios in this market. The $90 level above should also offer significant resistance as well, and a failure at that level would have us selling as well. Shooting stars, Bearish Engulfing Candles, and generally negative ones in the area would have us selling.
The markets looks like they are either going to build a base from which to bounce from, or a spot from which to breakdown from. The two levels mentioned previously are for us the guidelines from which to trade. We like the idea of selling oil overall, as there is certainly a slower economy ahead for the various areas around the world, and this should cause demand to fall off of a cliff. This would typically force prices down, but there is also the specter of possible easing by central banks around the world, and this would more than likely push hard asset prices higher.
The Dollar will be key, and if the currency gains in a "safe haven" trade, this would have the oil markets falling. However, if the Federal Reserve eases, this could push oil prices higher as the Dollar loses value. The central banks around the world will be alert over this coming weekend, so there is a real possibility that we don't see a serious move in this market until next week as the election results in Greece need to be studied, and more importantly the reaction of the central banks around the world. The more easing we see, the more oil we would buy - at least for the short term.
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Originally posted here