All roads point south for WTI crude oil. Prices continue to fall and are threatening to extend the daily losing streak to five. Trading volumes have now rolled from the August to September contract, but that hasn’t stopped the bearish action. At press time, September WTI crude oil futures are pushing session lows beneath $56.00.

If WTI prices are indicative of forthcoming economic growth, then a global recession is a very real possibility. Prices have fallen more than $5.00 per barrel since last Thursday ― an epic selloff considering falling inventories and increased U.S./Iran tensions coinciding with the height of buying season. Simply put, the WTI market is weak.

Farewell To August WTI Crude Oil Futures

With trading volumes being firmly dominated by the September issue, it is time to bid farewell to August WTI futures. Below is a last look at the bearish action on the daily chart.

August WTI Crude Oil Futures (CL), Daily Chart
August WTI Crude Oil Futures (CL), Daily Chart

Here are two support levels that may set up as resistance if this market reverses:

  • Resistance(1): Daily SMA, $57.82
  • Resistance(2): Bollinger MP, $57.85

Bottom Line: At press time (11:00 AM EST), September WTI futures are trading at about a 13 cent premium over the August contract. Prices continue to fall and may be poised for a run at the $55.00 psychological level.

Until elected, I will have buy orders queued up from $55.09 in September WTI crude oil. With an initial stop at $54.99, this ultra short-term scalp yields a quick 10 ticks on a 1:1 risk vs reward management plan.

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