On Tuesday, June 14 'Commodities Mansion' forecasted 'choppy range bound' prices of light sweet crude oil. However, it was also noted if the price broke the $95 resistance level a further drop would be indicated. What does this mean? Resistance is the price at which a financial instrument, in this case oil commodities futures tests by not extending past that point. In other words, after not breaking through the value of $95 more than once it becomes a resistance point.
On Wednesday, June 15 WTI Crude Oil closed at $95.19 according to Bloomberg News. This price is very close to the resistance level discussed by Commodities Mansion in the above technical analysis video. The price of oil seems to have recently been correlated with broader market performance rising and falling with it. Moreover, since the major indexes such as the S&P 500 fell today, so it seems did oil.
A question becomes does the breaking of low price resistance carry the same weight if the broader market also encourages it? One would think so especially since a market resistance point is also near; approximately 1,260 for the S&P 500 and 11,500 for the Dow Jones Industrial Average. If index resistance levels are also broken soon after the bearish oil technical oil indicator of $95 per barrel is breached, then the indicator seems stronger and speculators have greater reason to sell.
If the indexes don't fall past their resistance levels, the price of light sweet crude oil appears more likely to continue range bound trading even if it drops below $95. This is because the broader and possibly influential market indexes pattern may be range bound in the short-run until it resolves whether or not more selling is due.
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