- Crude oil has shown itself to be rather strong as Donald Trump announced the potential for tariffs being increased against Russia if the Ukraine war doesn’t come to an end.
- Whether or not this actually happens remains to be seen, but I think at this point in time, you’re basically looking for some excuse to go higher and we got it.
Now, whether or not that actually means anything, it really doesn’t matter. At this point, we basically are reaching close to that $72.50 level. And I do think that the 200-day EMA hanging around in that same region will continue to offer a bit of a ceiling in this market. All things being equal, this is a market where if we were to break above the $72.50 level, then it’s likely that we could break much higher. In the short term though, it wouldn’t surprise me at all to see a little bit of a pullback, but that pullback I think ultimately opens up the possibility of value hunting, especially closer to the $70 level.
Big Figure
The $70 level is a large, round, psychologically significant figure and it also features the 50 day EMA now. So, I think that comes into the picture as well. While I do believe that oil goes higher over the longer term, I also think this is a bit of an overreaction. So, I’m looking for value. This just tells me that the market at least wants to go higher. And a lot of times it will show its hand ahead of the actual move.
It might’ve just done that. Again though, if we break above the 200 day EMA at that point in time, you probably don’t get a significant pullback and you just if you want to be involved, you’re going to have to pay up. I think you will get an opportunity at lower levels, though.
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