Oil keeps bouncing back

Yesterday we were looking at the failure in WTI around $43 area. We'd seen triple top in place and I warned that a break of 42.00 could be trouble. It did, and it was and we saw the best part of a buck come off the price before it stabilised. And guess what, here we are back up at the $43 area banging our head on the recent highs, in no small part due to waffle from the Saudi's.

WTI H4 chart

What do we do now?

The 43 area is obviously strong enough to repel what's being thrown at it. Is it still good to short at? possibly but each time we test it the risk of a break increases. If we know that then we can plan our trades accordingly and manage our risk accordingly, either by lowering our trade size or the amount of room we give our stops.

It's a given that we are going to get more and more chatter ahead of this IEF meeting in September. We get it for the OPEC meetings and every other shindig these clowns hold. That almost always results in the price going up. If we know that then we further know where our risk lies, in this case shorts. So short away if you feel that's the trade for you but be aware of the conditions you are doing so in. If you want to be on the long side, then use these failures to get into longs.