By FXEmpire.com
The Light Sweet Crude markets spent much of the previous week drifting lower, but managed to bounce to form a hammer by the close on Friday. The $102 level has been acting especially supportive lately, and the $105 level looks as if it is resistive as well. Because of this, trading has been very tight lately, but looking at the longer term charts in general, this market looks like it is ready to start climbing again.
The oil demand in several parts of the industrial world is slowing, but the emerging markets have been making up for the lack of demand in places like Europe in spades. In fact, the Chinese and Indian demand is expected to keep a bit of a bid in this market going forward.
The Middle East part of the equation never really goes away, although the emphasis on Iran has been somewhat dimmed by a promise to talk about things later. (No doubt a chance for the Iranians to continue the nuclear program unmolested.) The situation in the Middle East has the potential of adding $5 to $10 to the price of oil at any point as there as many unknowns at the moment.
The Federal Reserve Chairman Ben Bernanke also suggested that further accommodation could be possible if needed also seems to have many traders bullish for commodities as well. Of course, he didn’t explicitly say quantitative easing, but this is what the market heard, and as such the Dollar is losing value again – always a catalyst for oil to rise in price it seems.
We see the longer term movement in this market to the upside, and are only thinking of buying at this point. The hammer that formed for this past week is a supportive signal, and normally we would buy on a break of the top of it. However, as we are so close to the $105 level, we simply are waiting to see a daily close above that level in which to go long of this market on. As for selling – we aren’t.
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Originally posted here
