Top Trader: Levels to Watch on Crude

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Crude oil has struggled all week as traders worry about demand.

On Wednesday, the release of inventory reports will get a lot of attention and traders must define their risk heading into such a report or stay flat crude oil. The market is currently at $91.40 a barrel and bouncing off of our S1 with a low Wednesday of $91.09, shorts that remained in the trade yesterday selling in the $93 area should have already closed or redefined their risk to lock in a profitable trade. The US$ ahead of data this week and the presidential debate has stayed range bound and has made it difficult for commodities to break out of their current ranges (as it trades inversely to commodities).

So what’s my plan? Play the ranges.

I’m selling crude until it breaks out above the $94.28 - $94.69 range. But on the flip side, there is a presidential election in Venezuela which brings some uncertainty to the oil markets. Considering that, and the jobs data on Friday, the market seems poised to retest last month’s lows. So if oil were to hit around $89.00, I’d be inclined to be a buyer at those levels.

I’ll have more on this during the "Futures Now" segment on CNBC's "Fast Money Halftime Report" Wednesday at 12 p.m. ET.

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