Why does the CL seem to be trending better overnight? | Traders Hideout

futures.io - futures trading strategies, market news, trading charts and platforms

Traders Hideout

Discuss day trading practices and futures trading strategies on this forum for all markets. This forum is also for discussing and reviews for brokers, data feeds, and commercial or third party add-ons


Why does the CL seem to be trending better overnight?

  #8 (permalink)

Melaka, Malaysia
Posts: 3 since Feb 2017
Thanks: 1 given, 3 received

In markets like CL the term "overnight" is imho a bit misleading; better to call it Apac and Euro sessions. Crude is a truly international commodity and not tied too much to the US session, although that's still the most volatile part of the 23 hour day. I would argue that there is about the same share of retail vs institutional traders in the Apac/Euro sessions compared to the US session (including Algos), just less of them.

In my opinion, the observed phenomenon relates to time differences and news flow. CL is in a very tight contraction with historic speculative positioning - hedge funds playing the bulls, producers selling to them (c.f., COT reports). In that situation, movements are mostly news driven with lots of noise ... and major news drivers (i.e., OPEC compliance data) over the past weeks originate in Euro (Russia) / ME time zones ... apart from the inventory reports which are of course during US hours. Big houses have their trade desks manned 23/5 and react accordingly. So, sometimes the action is already over when you guys wake up.

Reply With Quote
The following 2 users say Thank You to fhx13 for this post: