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Rich Ilczyszyn: Levels to Watch On Crude

Wednesday, 24 Oct 2012 | 1:09 PM ET
Rosanne Olson | The Image Bank | Getty Images

Crude oil traded to my target support area, with a low of $85.69 Tuesday, so where's it headed now?

This market heads into a day that can be easily swung by economic optimism or pessimism complimented by weekly crude oil inventories, which were larger than expected. With a stronger U.S. dollar Wednesday, there will be continued pressure on oil, as well as on commodities in general. Right now, it appears as though $88 is the battleground level for oil. Above it, oil simply cannot seem to find a bid. On bullish news, it will still be very tough for this market to climb back.

My Best Trade
Futures Now trader Rich Ilczyszyn went with his gut feeling during the decline of the crude oil market and profited from his beliefs.

(Related: Plunging Oil Prices Are Big Boost for US Drivers.)

So how am I looking to trade crude now?

I will look to sell the first test to $88. Another way I will be playing this is by looking to go short on a violation and further confirmation of that violation with a close below $85.50. The next level below is a major range retracement to $82.16. The back-up-the-truck price I'm looking for is $78, the major support level which is around this and last year's low.

The refined products are a bit oversold — RBOB gas traded to a key retracement level around $2.520, looking at a bit of a correctional bounce which could bring sector up a bit.

(Poll: Where Do You Think Gasoline Is Going?)

What Rich is Watching

  Name Price   Change %Change Volume
BRENT
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OIL
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Read on for 10 Things You Need to Know to Trade Futures

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