By FXEmpire.com
The Light Sweet Crude markets found themselves doing very little during the Tuesday session. This seems to be the general attitude of the markets lately, as we try to figure out exactly what the industrial demand for crude oil will be around the world.
With the situation involving the West and the Iranians, it seems as if we have reached a point in time where things may be put in the back burner. While the potential for flare-ups obviously is still there, it does look like we are starting to see the market care less and less about that problem. While nobody can predict the future, it’s probably a decent bet to think sooner or later the Iranians will become a problem again. However, in the near term it appears that the market is ready to forget about them.
The candles shape for the session on Tuesday was a very tight looking hammer. In fact, it’s more of a dingy than anything else. Because of this, it looks like the market to simply isn’t ready to make a decision one way or the other in the immediate future. We still see this as a fundamental issue of supply versus demand, and right now it appears that the demand is very weak globally. With concerns of slowing down in China, and the obvious recession and the European Union, it’s hard to believe that oil demand is going to be strong in the near future.
We think ultimately that the oil markets does sag further. However, there is always going to be potential for a flare-up with the Iranians. Because of this, we think that any surges higher will more than likely be knee-jerk reactions that can be faded eventually. Cooler heads will prevail, and fading those headline reactions can be ways to profit from this market. Granted, we have fallen quite far in the rally wouldn’t be out of the question. Again though, that rally would simply be an invitation to sell at various resistance points. We currently see the $85 and $90 levels as great spots to begin selling if we get a rally that fails. As for buying, we need to see the $92 level taken out.
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Originally posted here
