Light Sweet Crude markets continue to grind away in the consolidation area that we have been watching for days. The candle for the Thursday session produced a shooting star, and this was just after a hammer. The $98 level still looks like massive support, and as long as we are above that level it is impossible to short this market. However, it is becoming increasingly obvious that the oil markets are struggling with the $104 - $105 area as well. The recent action sees the market grinding lower, but the breakdown won't be complete until sub-$98.
We are looking to go short in this market currently, as the highs continue to get lower. However, until we have closed below $98 - we simply wait. If somehow we close above $105, we would have to reassess the whole situation and buy.
Oil Forecast January 27, 2012, Technical Analysis
Crude Oil Pivot Points (Time Frame: 1 Day)
Name S3 S2 S1 Pivot R1 R2 R3