WTI Crude Oil Forecast: Market Falls to Kick Off Week

　　The West Texas Intermediate Crude Oil market pulled back a bit on Monday to kick off the week on its back foot. That being said, there are a lot of concerns when it comes to supply overwhelming the market, especially if there is a deal with the Iranians. If that is the case, between that and the United States allowing Chevron to start working in Venezuela, it could get rid of some of the imbalance that we have seen.

　　The size of the candlestick is rather impressive, at least in the sense that it goes against the most recent parabolic move. The market continues to see a lot of parabolic momentum get wiped out, so the question now is whether or not the market has gotten far too ahead of itself again. Judging by the candlestick, I would suggest that we are at the very least going to see a bit of a pullback. The market closing near the $105 level suggests that we could break through there, perhaps reaching towards the 50-day EMA.

　　We are starting to see a lot of calls out there for $200 per barrel of oil, and if experience has taught me one thing, it is that when things suddenly sound a bit overdone, you are closer to the end of the run than you are the beginning. That does not necessarily mean that I think we are going to break down in the short term, just that a pullback is probably coming. Longer term, we will get a hard crash in this market because that is how these types of things typically end. The volatility has been quite extraordinary, and that is something that is difficult for traders to stomach over long periods of time.

　　If we were to break down below the uptrend line underneath, that would be a significant change in attitude. However, you also need to keep in the back of your head that the highs from last week being broken would be very bullish. If that were to happen, then it is likely we will go looking towards the $120 level, maybe even the $130 level given enough time. In the short term, it is probably a matter of trying to find value along the way. At this juncture, I suspect that today's session will continue selling.