Don't fight Mr. Crude. This has been a very predictable trade – and that only happens once in a while, so take advantage of it.
Crude found resistance against the major $89 level again on Wednesday. After a very bearish inventory report, as builds in gasoline trumped a slight draw in crude, the market was able to recover slightly. The recovery found resistance against $88.25 on Wednesday, and again during midday trading Thursday. The levels have played amazingly well in this market, and the fact that crude has been range-bound is the best thing about trading it.
Look for a move in equities to lead crude. Also, look for a weaker U.S. dollar to allow crude to retest $89. Jobless claims and confidence numbers will be a focus.
So what's the take-away? If it's not broken, don't fix it. Just trade the range.
I will continue to sell rallies against $90.00, and continue to buy dips against $84.50. If you are in the short crude trade from last Tuesday's show, lock in a profit by rolling your stop down to $87.40.