Crude oil has had an interesting trading week, marked by heavy volumes. With a proximity test of $53.00, November WTI crude futures are in a late-week retracement phase. As my colleague Arslan outlined during the overnight, crude is primed for correction producing shorting opportunities.

A 164 tick range for November WTI crude was produced during Thursday’s session, dominated by sellers. Today’s trade is relatively quiet, with only the Baker Hughes Rig Count on the docket for later this afternoon.

Technicals

As of this writing, crude is moving lower, continuing yesterday’s bearish action.

November WTI Crude Oil Futures, Daily Chart

A few support levels:

• 62% retracement of weekly range at $51.33

• 78% retracement of weekly range at $50.93

• Weekly low at $50.39

In addition, today’s intraday high is below the 38% level of Thursday’s range, a bearish signal.

Bottom Line: Sellers have control of this market. The U.S. session is primed to continue to the bear until we near the close. At that point, we may see some profit-taking.

For the U.S. session, I will be selling the intraday 38% retracements for small ticks using a scalping methodology.

Also, Thursday’s low will see heavy participation, driving price lower. A short from $51.21 looking for $51.11 is a good breakout scenario. Also, playing short intraday timeframe compression points (inside bars and pennants using 5 minute, 15 minute, and 30 minute charts) around this level with a 1:1 R/R is a sound way to rack up a few ticks.

As always, trade smart and for tomorrow!