WTI Crude analysis on this EIA news day

Well there is dollar strength, weakness in the broad market and an overnight fall in WTI Crude prices combined with the EIA inventory news shifting a day into Thurday. All this has the making of a very volatile day with WTI Crude, so what is the safest way to trade this on a day like this. There is an aggressive short extension that has already dipped into it's .618% Fib retracement. If you have the courage to trade there setup, here it is presented to you in all it's glory:


Now for a more realistic story:

Bullish side story: We have initial resistance at 53.50, which we traded through in the session yesterday with the equity markets being closed in a day of national mourning from the passing away of President George H W Bush. We sank in the overnight session as the dollar remained strong. For the day, if we cannot hold 51.17 we will be in a sorry state of affairs and the bullish story vanishes. If we hold 51.17 we could scale all the way into that initial resistance area (53.50) especially after the EIA inventory news.

Bearish side story: The API inventory estimate for yesterday was as follows:

Crude: Previous 3.453 Million Actual 5.360 Million

Gasoline: +3.60 MB

Distillate: +4.3 MB

The bearish side does have a nice conservative story to paint as the trend is lower.

Here is the less aggressive setup and on a news day - you need this in your back pocket.

We are working on a short setup as a measured move from yesterdays high (54.45) to the new low of 50.23 made here in the European session. While the news will bring a classic dip into the Fib .618 retracement level, the most conservative short setup looks a tad bit like this: