Today marks the final trading day of August and the transition into the fall market season. It has certainly been a big month for October WTI crude oil futures, with values rallying more than $6.00 per barrel. The bullish action has been fueled by supply chain disruptions and robust global economic growth. Simply put, supply has come into question and demand has been hot.

For the session, WTI crude is seeing heavy two-way action at the $70.00 handle. Buyers and sellers are fighting it out at in this area, waiting for a directional move. Call it a gut feeling, but I am on the lookout for profit taking as the session wears on. August has brought extraordinary gains to institutional longs — I expect them to rack profits ahead of the U.S. Labor Day weekend.

October WTI Crude Oil Technicals

Earlier in the session, the bears ran price to a test of the current wave 38% retracement ($69.63, not pictured). As long as the current intrasession low at $69.64 holds firm, then a daily bullish bias remains valid. If it is taken out, then an extended selloff is probable.

Overview: The Baker Hughes Rig Count is due out today during the late-U.S. session at 1:00 PM EST. Last week brought a decrease of nine North American drill rigs. It will be interesting to see if this trend continues as the summer production season draws to a close.

Timing is going to be very important for today’s crude market. As we approach the closing bell, be on the lookout for large-scale profit taking. This will be evident by a spike in traded volumes and large block orders hitting the market.

In the event that trading conditions become chaotic, there is no shame in taking a seat on the sidelines. Remember, “caution” is a good word!