• The West Texas Intermediate Crude Oil market has been bullish again during the trading session on Wednesday as we continue to see an attempted recovery.
• The $78 level is an area where we’ve seen a lot of bullish pressure, or at the very least a bit of support.
• Ultimately, crude oil has been getting hammered for some time, but it seems to be sticking to the idea of buying pressure in that area.

The lack of demand is a huge problem for crude oil, as the global economy is almost certainly going to slow down. If that is in fact going to be an issue, it’s very likely that we continue to see this market struggle as a result. On the other hand, if we can break above the $82.50 level, then we have a bit more of a potential long being formed, with the 50-Day EMA sitting right around the $85 level.
 

Waiting for a Trend Change

If we were to turn around and break down below the hammer from the Monday session, it’s very likely that we would see the market fall apart, breaking down to the $75 level, then eventually the $70 level. Keep in mind that even though OPEC has cut production by 2 million barrels a day, that has kept a little bit of hope in this market. However, now it looks as if the lack of demand is going to continue to be a major problem. In fact, with the next couple of days and the economic numbers coming out, people will start to focus on the Federal Reserve and what it is going to be doing about inflation. After all, if the Fed continues to tighten monetary policy it’s going to absolutely crush economic growth, which in turn will absolutely crush demand for crude oil. It all works in a circle, so therefore it’s worth paying close attention to.

I don’t have a situation where I a buyer has crude oil quite yet, but it is worth noting that the potential “double bottom” has formed, but if it is going to be a larger bottom, then it opens the possibility of a trend change. Quite frankly, that is going to be the case, we should have plenty of time to get involved in that type of switch.

(Click on image to enlarge)

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