The $101 Level on Crude Oil... Solid As a Rock?

[MichelGJulien 10]

After 5 bounces of the $101 support level since mid-July, we can confirm without a doubt that it represents THE support level to break for bears if they want to have any chance to see eventually a sub $100 crude oil price. In fact, it seems as if every time WTI's price approaches this level, something like an invisible hand stops it from breaking lower. Today it was the news that Congressional leaders were willing to accept a short-term increase in the country’s $16.7 trillion debt ceiling - therefore taking a step toward averting a default - that did the trick. Whatever the reason may be, it seems to me that some people definitely do not want to see price drop below this 3 digits number. Can this solid-as-a-rock support propels crude to new highs now? I would normally say yes, but nothing has been rally "normal" lately.

 

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Meet the "invisible hand" sitting at the $101 price level

 

Technically speaking, the bigger picture hasn't changed that much. Resistance lies above at the 20-dma (103.87) and below the support is still at the magical 101.05 floor. Should we finally break this support, 98.70 would immediately come into play in my opinion. Higher up, we would meet resistance around the 105.50/106 area. In the meantime, volatility is simply incredible on the oil market. It takes courage just to trade this monster. The joy of living dangerously (title of a book by India philosophe Osho) applies perfectly to the actual market conditions. Tomorrow, Friday, I would tend to believe that anything can happen really. Frankly, I'm not even going to try to guess which way this thing will go.

 

I took 1 new trade and completed 2 previous trades today:

 

1. Long 102.93 at 9:06am on Wednesday, exit 102.18 at 2:59am Thursday for a -75 ticks loss.

2. Long 101.44 at 10:33am on Wednesday, exit 102.18 at 2:59am Thursday for a +74 ticks profit.

3. Short 102.18 at 2:59am, exit 101.38 at 9:13am for a +80 ticks profit. Result: +79 ticks today

Edited October 11, 2013 by MichelGJulien

[Ammeo 10]

My medium term target is 85, which should be very possible if Syria plays ball (that's a big IF). Though we might see a small bounce from here due to Fed's short term dovishness...

[MichelGJulien 10]

Really hard to crack 101. Again today it tried but didn't make it.