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U.S. light, sweet crude for May fell to $92.79 a barrel on Thursday, yet some professional traders saw it as a bullish sign that black gold wasn't trading at a lower level, especially given a flurry of headwinds.
(Read More: Crude's Losses Snowball as Cyprus Swamps Market)
"We got the Cyprus issue, we still got a weak economy in Europe going on, China is still on the fence on how their economy is coming out of their little selloff and demand really hasn't picked up in this country," said Anthony Grisanti, founder of GRZ Energy in New York. "So I actually I like crude because I think it's held up well under all these negative circumstances."
(Read More: CNBC Explains 'Economy')
Crude oil has had a choppy ride over the last of couple days, but this is a phenomenal market to play using technicals.
The wall has been $94.45, which is the 50% retracement on the year, and a close above that level is needed to spark a potential breakout. Since then, though, crude has found major support against the 100- and 200-day moving averages at $92.60 and $92.45.
Crude oil was pushed lower on Thursday by fears of further turmoil in the euro zone, as Cyprus scrambled to avoid bankruptcy, and by manufacturing data which showed a deepening downturn in the currency bloc.
Brent crude futures last fell 0.7 percent to $108 a barrel. U.S. light, sweet crude was at $93 per barrel, down 0.8 percent.
The NASDAQ has shown impressive strength in the face negative headlines. Over the last two days, NASDAQ 100 futures have rejected the day's lows, and managed to finish with only mild losses.
The main reason for the relative strength is probably are surgence in Apple shares, as Doug Kass predicted on Thursday's episode of Futures Now. Apple accounts for some 13 percent of the NASDAQ weighting.
After a two-day meeting, the Fed is due to the release its monetary policy statement later this afternoon, as well as its economic forecasts. The news will be followed by a press briefing with Fed Chairman Ben Bernanke.
(CNBC Explains: Federal Reserve Open Market Operations)
Investors will be looking for any signs that the central bank could start winding down its quantitative easing program. It is expected to keep monetary policy unchanged this month however, continuing its super low rates policy and its $85 billion a month in asset purchases. Fed watchers expect it to stick with its program until the middle of next year, according to CNBC's Fed survey.
The outside chance that seemingly endless monetary stimulus could be on the road to withdrawal may upset bonds, yet traders expect Europe's latest troubles to limit any potential downside.
The 10-Year Treasury note has enjoyed a massive rally over the last three sessions, with yields hitting their lowest level in three weeks. Some investors are being drawn to bonds ahead of the U.S. Federal Reserve's policy decision on Wednesday.
The Fed's efforts to support an economic recovery has sent stocks on a tear, but also put a floor under bond prices. In September, it launched a third round of quantitative easing (QE), in which it will buy $40 billion of mortgage-backed securities per month, primarily in mortgage-backed bonds. Those open-ended purchases mean they will continue to flood markets with cheap liquidity indefinitely, in order to drive down unemployment.
(Read More: CNBC Explains the Federal Reserve)
The Dow Jones Industrial Average turned lower, dragged by Caterpillar. If the blue-chip index closes lower, it will log its first three-day losing streak this year.
The S&P 500 and the Nasdaq also tilted lower. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded above 13.
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