Crude oil is breaking and closing above my $100-$101 stop loss area today, but since there is also resistance in the $102 area and we are now entering a time period (May 12 - 28) when strong directional changes are likely in many markets, I am going to hold my short position for now with the assumption that even a minor correction will negate any loss and potentially give us a good gain. I am being a little more risk tolerant than normal with this position due to the relatively small amount of money I allocated to it. When opening this short position on May 2nd I wrote, "...I am being very cautious with this trade and I am not putting too much money into it as escalating violence in Ukraine may exacerbate geopolitical instability in this region and push crude prices higher." Clashes between Ukrainian armed forces and pro-Russian separatists are continuing, but today's rise in price is more likely the result of U.S. Energy Secretary Ernest Moniz's statement that the U.S. is considering relaxing the regulations that ban the export of crude oil to foreign countries. We will have to wait and see if the White House and Congress will follow through with this suggestion as it would require changing a 38 year old law banning exports and would have a significant effect on crude prices.
A major bullish signal appeared in the U.S. Dollar Index chart today so overall directional momentum in the dollar is now mixed bullish and bearish (it had been 100% bearish). This dollar surge may help to moderate oil prices.