The West Texas Intermediate Crude Oil market has been somewhat tight Wednesday as we continue to see

The West Texas Intermediate Crude Oil market has been somewhat tight Wednesday as we continue to see the oil markets worry about multiple issues at the same time. Because of this, I anticipate that we will have a lot of back and forth, probably very choppy action as we try to sort the future direction out.

The 200-day EMA is sitting just below and rising, so it does make a certain amount of sense that we would continue to see it show a bit of dynamic support. The market has been grinding higher over the longer term, but the reality is that this market has recently seen a lot of negativity enter. The 200 day EMA is starting to flat now, so the question now is whether or not the trend is trying to change. The 50 Day EMA is just below the $110 level and dropping.

Another thing that you have to pay close attention to above is the $100 level, as it should offer dynamic and psychological resistance. The noisy and choppy behavior can probably be written off as the idea of a recession coming and of course the possibility of supply issues at the same time. Demand should drive, but at the same time, there are questions as to whether or not supply can keep up. The market is likely to see a lot of significant pressure in both directions, so it‘s likely that we would see the most obvious trade as more of a “fade the rally” type situation on short-term charts. In other words, I’d be looking to fade short-term rallies, but I would not get married to any position.

If we break down below the $90 level, that would be a collapse of the market, but I don‘t see that happening easily. That being said, if we did see that happen, the market could drop down to the $80 level. Do not forget the US dollar component to this as well, because of the US dollar search the strength and quite drastically, that in and of itself could put a bit of downward pressure here. Either way, it’s not until we break above the $105 level that I would consider going long, and even then, Id feel better once we recovered the previous uptrend line.