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The CL Crude-analysis Thread
Started:December 17th, 2014 (02:33 PM) by tturner86 Views / Replies:125,309 / 1,753
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The CL Crude-analysis Thread

Old February 28th, 2015, 07:42 PM   #491 (permalink)
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Yep about the only thing we have seen so far is a rather dramatic drop in the rig count number, and a spike up in layoffs.

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Old February 28th, 2015, 09:35 PM   #492 (permalink)
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trendwaves View Post
Yep about the only thing we have seen so far is a rather dramatic drop in the rig count number, and a spike up in layoffs.

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Kind of got to feel bad for the small time well operators. So that looks like a ~30% drop in rigs count from a year ago. I've seen the same dataset over-layed with the EIA domestic production dataset (the weekly Wednesday one). So from the 2/20 report, domestic production was 9.285m barrels/day vs. 8.059m a year ago, a 15% increase. Sorry I can't locate the chart. But here is the report.

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Old March 1st, 2015, 07:35 AM   #493 (permalink)
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A major factor



wirechild View Post
If you follow the larger picture in regards to oil then this is a good article.

The real reason OPEC cut oil prices | Futures Magazine

I tend to agree with the basis of the article, although there are several factors that they don't address. Most of the are political though. I don't think to much changes in the next 6 months either. We could very easily see ~30's or ~70's before end of year but I really have no idea and don't see much value in predictions.

We haven't seen any capitulation from the industry yet. Until we see bankruptcy, bond defaults, above average M&A, etc. I don't see OPEC and Saudi Arabia pushing prices higher.

The US has shutdown many wells, ~10%, that were not as profitable at these prices and increased production on other wells that are profitable. We are also buying as much as can be stored to sell/use later. Many countries (Iran, Russia, Nigeria) that rely heavily on oil as a main source of income has increased production to offset the lower revenues. Until this changes there isn't much reason for oil to go much higher.

It is my belief that several of the OPEC countries (as well as corporations) were aggressively buying the dollar as oil started falling to offset many of their losses. The dollar is still very strong and doesn't show much sign of a major shift.

I still have a core short, SCO, position from early Dec. and have been trading around that. I am more of a swing trader and like to hold positions for at least a week and sometimes a few months. I have been trading a little more aggressive lately as we have been in a nice range. I currently have a small long position on via UCO with an average of ~$7.70 looking for 9+.

It takes a very disciplined trader to trade CL daily. I am able to watch it close enough intraday so I seldom trade more than a few contracts. Good luck to those that are trading it daily!

I also happen to hold a SCO short position.

My input

Two major factors

The trend line from 98 to 09 to present day. CL is right on this. Go to a twenty year chart and draw that line.

When Spring/Summer hits and people start driving more, more gas is consumed and that will have an effect on the market.

The 50 day moving average on a daily chart. Worth a good look at that.

thinkorswim Sharing

Is CL just to continue to trend sideways and how is it going to respond to the 50 MA?

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Old March 1st, 2015, 02:52 PM   #494 (permalink)
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For those that use ToS, there's a thread over at thinkscripter dot com in "Trading...... /CL" that has a study which paints hour (or any other time) windows if you are interested in "time phenomena."

Instead of looking at H1 charts you can look at M1 or M5 etc in an hour window and see price action, reaction - high/ low. one hour to the other etc.

The study/ thread should be in the "public" forum. The post is "Sun Mar 01, 2015 2:39 pm" If not public, I don't know what to tell 'ya.

-Bill_M

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Old March 1st, 2015, 03:13 PM   #495 (permalink)
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Futures Edge on FIO

Are you a NinjaTrader user?

 
Friday was a so-so day, this would have helped me in scalping

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EDIT

Sorry about that, that's M5 - here's M1

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Old March 1st, 2015, 03:30 PM   #496 (permalink)
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Interesting(?) take on oil

-Bill

The oil price: The Saudi project, part two | The Economist

EDIT Damn, sorry about that - FEB 21 2015


Last edited by WilleeMac; March 1st, 2015 at 03:54 PM.
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Old March 1st, 2015, 08:06 PM   #497 (permalink)
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Leverage


trendwaves View Post
Each futures broker will set a day margin on CL, most seem to be around $1000 to $1500 per contract. The overnight margin or SPAN margin is set by the exchange. This is the performance bond ($) you have to put up to carry a position across the session close and into the next session. For CL the overnight margin is currently $4,900 on the front month contract. The risk manager at your brokerage will execute a margin call on your open position if at any time your account balance is unable to meet these performance requirements.



I think most traders, especially in CL, day trade because of the volatility of the contract and the open risk to hold a position for any length of time. I will sometimes hold an intra-day position trade in CL and typically use a stop of 40 ticks or more ($400 per contract) in order to hold that position during the day. If you want to get at those infamous 100 tick CL runs, your going to need more than a 10 tick stop to stay in the trade. Many traders are either unwilling or unable to carry that much risk per contract for any length of time. So it's most likely less related to success of one over the other, swing trading or day trading, but more related to how much heat a trader (and their account) can withstand to hold a position.

In order to translate your ETF strategy to CL, you will have to do the math related to where your stop would be in the ETF as it maps onto the CL price structure. Then figure out how much risk you would be exposed to in order to maintain the same trade management strategy. Another way of looking at this is, how many of your ETF shares would be required to equal one CL contract ? A $1 move in the price of CL equals $1,000 per contract, so how many shares of the ETF gives the equivalent $1,000 profit ?

Well, how about the leverage that is offered by the ETF's.

What are your thoughts on that?

I think a 3x ETF such as ERY is just playing with straight gunpowder. If you are taking on risk, your thoughts about the leverage offered by the 2X's ETF, such as SCO versus trading the straight contract?

Why are you trading a straight contract versus the leverage that is offered by a 2X's ETF.

I think that this may be more applicable to swing position trading than intraday. Intraday, I can see that the volatility and risk are too high.

But if you are swing trading, any thoughts out there from the board as to whether to trade the straight contact or to use the leverage of a 2X's ETF as long as you put your stops in well?

Just trying to develop a trading strategy for myself. Would appreciate any opinions..

Going to a larger chart, how is crude oil going to respond to the 50 SMA on the daily chart? That's exactly, where crude oil is.

I think even trading intraday, take a look at that 50 SMA, that's where we are at. Is it going to buck or bolt it?


Last edited by e4williams; March 2nd, 2015 at 02:12 AM.
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Old March 2nd, 2015, 06:10 AM   #498 (permalink)
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night lights beautiful view out of my hotel in Anchorage Alaska

perfect for a trade...

Short Crude @49.19, below VWAP. looking for strong move lower but price has to break 48.91 PW-VAL
...had a controlling bar on the 1440 and a gap to move lower at the open sunday night. My targets loosley speaking will be looking for 46.90 area lots of noise there. My stop loss is 49.49 Anybody do 6,8 or even 10 ticks stop loss for crude is suicide. No Bullshit.

Daily and Weekly VWAPS suggest a downward bias...daily and weekly pvots suggest and upward bias however, the weekly Central pivot were defefended as well as was the Daily Pivot Decision Point and Central Pivot.


@tturner86 you have any thoughts on this? Anyone else?

Johnny


Last edited by Devil Man; March 2nd, 2015 at 06:11 AM. Reason: fat finger
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Old March 2nd, 2015, 06:57 AM   #499 (permalink)
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@e4williams

IMO trade what you're comfortable with. I think the natural progression in trading is: Stocks/ ETF's/ all, Options, Futures. Futures are a unique animal all to themselves, esp /CL or /GC.

If you're wanting to get in on the John Wayne, set up a practice account (paper) that mimic's actual fills. Some paper accounts will give you unrealistic fills - for example, Infinity is a tad bit harder to get filled on paper than real dollars, meaning on paper it has to trade through your strike to get filled.

And you absolutely must treat the paper account as real dollars or you will learn absolutely nothing. IIRCC, @FuturesTrader71 said, put a trade on, get in the game - by being in the game you will learn more than watching the game (some paraphrase.) @DionysusToast has some excellent videos here at futures.io (formerly BMT) and at his website for teaching trading futures. One of the interesting things he has put forth (prop shops) is take a portion of your day and take no more than 4 ticks (example) 6 ticks, no less than X ticks, no more than X ticks loss etc. Write everything down and go back through the day.

I'm a huge advocate (as is Mr Dalton) of writing (physical) vs typing to remember things - it just seems to work that way.

@Devil Man "6,8 or even 10 ticks stop loss" I dunno, depends on the means to the end, what you be up to

-Bill_M

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Old March 2nd, 2015, 07:27 AM   #500 (permalink)
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Devil Man View Post
perfect for a trade...

Short Crude @49.19, below VWAP. looking for strong move lower but price has to break 48.91 PW-VAL
...had a controlling bar on the 1440 and a gap to move lower at the open sunday night. My targets loosley speaking will be looking for 46.90 area lots of noise there. My stop loss is 49.49 Anybody do 6,8 or even 10 ticks stop loss for crude is suicide. No Bullshit.

Daily and Weekly VWAPS suggest a downward bias...daily and weekly pvots suggest and upward bias however, the weekly Central pivot were defefended as well as was the Daily Pivot Decision Point and Central Pivot.


@tturner86 you have any thoughts on this? Anyone else?

Johnny

Based off Globex price action there is no reason to be excited about longs, In fact there is nothing to be excited about - shorts or longs. If CL is stuck in a 35 ticks range ( just like she did during Friday session till 1 pm), i try to trade smallest size possible.

If i had to trade here- it will be from the short side.



My posts are not meant to give financial advice neither do they imply that my method is special. "THIS IS WHAT I COULD BE IF I HAD A TOTALLY CARE FREE STATE OF MIND DURING TRADING" Mark Douglas.
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