By FXEmpire.com
The Light Sweet Crude markets had a very quiet session on Tuesday as the markets had very little to move on. The recent action has been very tight, but with signs of a bullish bias in this market. The $104 level has been very stubborn in its support, and it appears that the market will find breaking below that mark very difficult. We find this as a market that can only be bought, and in fact won’t sell until the $95 level gives way to the downside.
The Middle East continues to offer headlines that could push this market higher, as the Iranians and western economies continue to argue about nuclear ambitions in the Gulf. The threats of some kind of armed conflict and disruption continue to have the oil markets on edge, and one would have to think that sooner or later a resolution will come – and this would drive the price of oil down. However, there are also the emerging markets and the massive demand out of places like India and China, and this will still keep the market somewhat bid overall. The oil markets are ones that we simply will not sell at this point in time as the headline risks are certainly all to the upside at this point.
The move going forward will more than likely revolve around headlines, and it seems that the world may just be getting ready to experience $100 a barrel oil as the norm. The volatility has just about dropped off the map, so this suggests that the market is very comfortable in this range, and with the possible headline shocks coming, this means that the market is probably more prone to rise than fall.
In order to buy this market, we simply need to see the $104 level hold going forward. We are buying on dips, knowing that the market may take its sweet time moving higher. With that in mind, we also may look at scalping the market back and forth in this tight range. Selling won’t happen anytime soon as the trend is so strong.
Oil Forecast March 28, 2012, Technical Analysis
Originally posted here
