Investors are piling into commodities during the early U.S. session. Both gold and WTI crude oil are posting major rallies, each in the midst of steep intraday bullish trends. To be honest, all U.S. markets are roaring. The DJIA has opened 400 points higher and the S&P 500 is up 28. The big loser is the USD, slumping badly against the Euro, British pound, and Canadian dollar.

The breakout in crude oil is significant. At press time, May WTI futures are up over $1.50 on heavy volumes. The bulls are in complete control, running price toward several key topside levels.

WTI Crude Oil Futures

Big round numbers often dictate market behavior. Today is shaping up to be a prime example of this phenomenon, with $65.00 a probable catalyst of heavy two-way action.

Daily ranges have expanded dramatically over the past three sessions. Even though Monday’s range traded inside of Friday’s, it was still a robust 168 ticks. Upon the break above the Monday high of $63.61, buyers have entered this market in force.

Here are the two topside levels I will be watching intently for the remainder of the session:

• Resistance(1): Psyche Level, $65.00
• Resistance(2): 78% Retracement of Current Wave, $65.51

Bottom Line: As of this writing, WTI crude has put in an intraday top of $64.91. The $65.00 level will be key in today’s trade. A bulk of stop orders will be triggered above $65.00. If this occurs, look for a test of $65.51 at some point later on in the session.

I will have sell orders queued up from $65.44 for the rest of the day. With an initial stop at $65.56, this setup produces a tight 12 ticks on a 1:1 risk/reward management plan. The intraday uptrend is strong, so a position trade from this level will first require proof of exhaustion. For now, a short-term scalp yields a decent return with moderate risk.