Editor's Note: Due to Hurricane Sandy, there will be no "Futures Now" show on Tuesday, Oct. 30.
The "Perfect Storm" is pushing the price of crude over the edge.
Crude oiltraded slightly higher Tuesday, with a weaker U.S. dollar relieving demand concerns, and an oversupply caused by Hurricane Sandy. The energy floor at the New York Mercantile Exchange will remained closed for a second-straight session on Tuesday because of Hurricane Sandy, the first two-day weather-related shutdown of the markets since 1888. In turn, volumes will likely be much lighter than usual.
I will continue to look for resistance building against $86.50, as yesterday's high was $86.43. It will be important for oil traders to look for any definitive answer on when refineries could intend to turn back to full production capacity. With a weaker dollar that has seen the U.S. Dollar Index struggle around $80.30, a close back below $80 will help commodity prices ahead of Chinese manufacturing data Wednesday evening. Also, as the storm makes bets on oil less measured as to risk, if oil cannot close below $84.94, it may cause short covering today.
(Read More: Oil Markets Brace for 'Demand Destruction' After Sandy.)
So how am I looking to trade oil right now?
Upon a close below these levels I will be looking to add to short positions, with the next major support level coming in at $82.16. Only a close back above $88 will put this market back into neutral-to-bullish territory.
Read on for 10 Things You Need to Know to Trade Futures
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