December 1, 2022 [DailyForex] – We are on the precipice of either forming a massive double bottom or sending this market even lower over the next couple of weeks.
The WTI Crude Oil market has done very little during thin Thanksgiving trading on Thursday.
This is a market that obviously had limited volume, as well as limited hours to move. Because of this, it’s not a huge surprise to see the market to simply sit still.
We are sitting on top of a major support level, so if we were to break down below the hammer on Monday, that opens up a flood of selling from what I can tell.
Looking at this chart, break down below that level could send the WTI market down to the $75 level, perhaps even down to the $72.50 level. The market obviously is starting to focus more on demand, or perhaps better put, demand destruction. If we continue to see a lot of negativity in the overall global economy, it does make a certain amount of sense that we would see this market drop, as oil is considered to be the “lifeblood” of the global economy. It’s worth noting that freight numbers are starting to drop, meaning that the demand is continuing to fall through the floor.
Market Could Go Lower
If we turn around and rally, the market could break above the nasty candlestick on Thursday, opening up the possibility of a move toward the 50-Day EMA. The market will almost certainly see a lot of noise in general, but I think that move will more likely than not run out of momentum given enough time. It’s a bit of irony at this point, as stocks look ready to break out, but oil still looks very vulnerable. The markets will open again on Friday, but it will be limited as well, not only due to the hours in the futures market but the fact because most of the big oil houses in the United States won’t even be trading.
It is because of this I think you need to pay more attention to the Monday candlestick than anything else, as it could give you a bit of a “heads up” as to whether or not we are going to get a bounce, or if we are finally getting ready to break down more significantly. We are on the precipice of either forming a massive double bottom or sending this market even lower over the next couple of weeks.