Vladimir Putin has suggested that he was a little bit more optimistic about a diplomatic end to the crisis on the border, so
markets sold off just a bit. That being said, it should be noted that the selloff was rather quick, but it was more or less the “panic bid” that we were trying to unwind.The $90 level looks as if it is trying to hold the market up, and that does make sense considering that it is a large, round, psychologically significant figure. Even if it does not hold up the market, I think that it is only a matter of time before you can be a buyer.
The demand situation still remains intact, so I do think the buyers will continue to come back into this market every time they get the opportunity. After all, we are in the midst of the “reopening trade”, showing markets around the world demanding much more energy as we are trying to get back to normal. Whether or not that will continue is completely up for debate, but in the short term it certainly looks likely.
If we do break down below the $90 level, then the $87.50 level would be the next area that will be looking to pick up. Underneath, you have the $85 level where I would anticipate a ton of support not only based upon a round midcentury figure, but the fact that it was a previous high and we have the 50 day EMA sitting in that same general vicinity. With this, I still believe this is more of a “buy on the dips” situation.