WTI Crude Oil (USO, quote) is trending higher in early trading by $0.88 or 0.87% at $101.16 ahead of the non-Farm Payroll Report. It’s worth noting that crude oil typically remains flat ahead of the report.

Crude oil for many traders is used as an indicator of what’s come.

On Wednesday the fundamentals and technicals were pushing and pulling on the price action.  The Department of Energy reported on Wednesday a -2.4 million barrel build which clearly was good news for the bulls but the following day we got the final piece of a candlestick pattern called a Shooting Star on the daily chart and put downward pressure on crude oil’s spot price.

The technicals pushed price fast and hard below the $100 support level to $98.73.  Fast forward today and we find price moving above 101, but who will remain in charge?

If we look purely at the technical side and push the NFP to the sidelines the chart is suggest price is testing the Shooting Star pattern before continuing lower. In fact a technical trader looks for test to initiate their position.

However, if we bring the fundamental pieces back in the huge draw down in inventory and the NFP report out due in about an hour could suggest Mr. Market is looking for a strong NFP report.

Which camp’s view is correct?  It’s difficult to see at this point but we are leaning toward fundamentals as the NFP report is a very strong economic report that has far reaching effects.

Once price moves above $102.18 it will have nullified the Shooting Star pattern and if analyst are correct that the NFP report will indicate significant job creations we will look to price taking out the pattern.

Here at CAMS we use the crude oil as forward looking indicator in that Wednesday we had a huge draw unexpectedly telling us the economy is moving. If the economy is moving…jobs are being created.

However, how the technicals and fundaments coverage the last 3 days we are sitting this one out.