The Light Sweet Crude markets absolutely exploded to the upside on Tuesday as traders continue to worry about the Iranian threat to close down the Strait of Hormuz. However, it is highly unlikely that the Iranians are willing to actually go through with this threat as the United States has made it abundantly clear that action would be taken. Could this perhaps finally be the spark that starts the long assumed war between the two countries? Perhaps this is the question traders are asking now.
However, it is obvious that the technical are saying that the market is going to get pushed upwards. The real question is whether or not the $105 level gives way. If it does – then there would be no doubt that we are going much higher. In fact, there is a case to be made for a bullish flag break during the Tuesday session, but with the $105 resistance area being just above – the prudent trader will wait to see if the area gives way. We are willing to trade in either direction, but we need to see how the market reacts to $105 before committing capital.
Oil Forecast January 4th, 2012, Technical Analysis
Originally posted here
