By FX Empire.com
The Light Sweet Crude market printed an odd candle for the Friday session as the worries in Europe continue to thrash veracious markets around. The debt crisis keeps dragging on, and it appears that some nerves were unsettled during the session as the market tries to understand the issues around the deal.
The $100 level sent the market down again, and with this observation we simply reiterate the resistive nature of the handle. The market did get a bounce later in the session however, and looks as if the bulls are going to attempt to finally break back over the resistance area. Because of this back and forth nature of this market, most traders will be best served by staying out of the trade for the time being.
A drop below the $96 level has us selling, and a $102 print would have us bullish as it would show the downtrend channel giving way. Until then, we are content to sit still. The near term has far too many headline risks out there to expect stability, and any of them could come into play at any moment. The issues in Europe involving debt continue to make traders a bit more “risk off” in their nature, and as the crisis seems to be going nowhere, there will be continued nervousness in the markets.
The Iranians are still saber rattling, and the markets will continue to be nervous about any potential conflicts in the Persian Gulf region. The crisis has been going on for some time, and while most people don’t believe a war is a given, there is still concern to things like supply disruptions either on purpose or on accident. In the meantime, the markets will continue to chop around and make all trades end up being extremely short-term in nature.
Unless you are planning to scalp the Light Sweet Crude contract, the next several days could be very difficult to work around. The levels we mentioned before would signal a continuation of momentum in one direction or the other, and that is exactly what the markets need at the moment.
Oil Forecast February 13, 2012, Technical Analysis
Originally posted here
