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The CL Crude-analysis Thread
Started:December 17th, 2014 (02:33 PM) by tturner86 Views / Replies:125,726 / 1,754
Last Reply:December 4th, 2016 (01:02 AM) Attachments:450

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The CL Crude-analysis Thread

Old January 16th, 2015, 12:43 AM   #71 (permalink)
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madLyfe View Post

I think tastytrade do some great educational pieces. This is a good one for many people


tigertrader View Post
that cl has a -.91 correlation with bonds, and a +.97 correlation with canadian dollar, and a 1.00 correlation with rb, and that lead/lag relationships exist on a daily basis.

And according to tastytrade...

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Old January 16th, 2015, 05:05 PM   #73 (permalink)
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SMCJB View Post
Question @mfbreakout when you say "when the term structure changes" what are you looking for/at? I personnally do not trade CL flat price, but I do trade term structure so I am curious what you mean.

On another note I shared a different article with a friend in the shipping industry where media sources talked about people utilizing VLCCs as floating storage. They interestingly contradicted that story and said at this point there is little evidence of that happening and that the VLCC market is actually quiet weak,

Hi SMCJB,

By term structure i mean it need to move back from contango to backwardation. As far as technical evidence i am looking for that Crude Oil has put a bottom in- all CL has to do rip 300 ticks up and never visit that area again- whether it's $44, 40 or whatever it may be. So far, CL rips up and then gives up everything within same day or within next day or two. This kind of behavior is typical when something is extremely bearish. We get strongest rips up - short squeze etc- within a bearish trend and then so called bullish candles, price action etc disappears.

Crude to 'go the way of whale oil': Dennis Gartman.



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Last edited by mfbreakout; January 16th, 2015 at 05:16 PM.
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Old January 16th, 2015, 08:35 PM   #74 (permalink)
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mfbreakout View Post
By term structure i mean it need to move back from contango to backwardation.

Crude vs 1st Month Spread
14.6 R2
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Crude vs 2nd Month Spread
25.3 R2, Getting Better
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Crude vs 1st-vs-6th Spread
31.0 R2, Getting Better
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Crude vs 2nd-vs-6th Spread
34.0 R2, Getting Even Better
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Crude vs 6th-vs-12th Spread
53.3 R2, Now We Are Talking
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Old January 16th, 2015, 08:42 PM   #75 (permalink)
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Crude vs 6th-vs-12th Spread
53.3 R2, Now We Are Talking
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I see a dove...

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Old January 16th, 2015, 09:31 PM   #76 (permalink)
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OPECs strategy is working, and it will be obvious in U.S. production by midyear when growth from shale plays will come to a halt,


Need more than a drop in production growth before S/D corrects.

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Old January 18th, 2015, 09:42 AM   #77 (permalink)
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TA analysis on WTI Crude

I have three questions,

1. I have spent 40 minutes on Google trying to find an inverse 1x inverse ETF on WTI crude oil, any recommendations.

2. My price projection for WTI Crude is down to 26 or 28 within two to two and a half months. How best to trade that??
I was just thinking a short EFT 1x, which apparently I am having great difficulty in finding.

3. One thing I am closely examining on the technical analysis side is the angle of the drop in oil price in 2008, If one looks at that on a monthly chart. We have six candlesticks down. Until bottom was hit. Losing and average of about 14 points a month. On this downturn we have about 3 candlesticks down, losing about 9 or 10 points a month. I have a price projection of 26. Now, I need someone here better than math than I am. Should I be looking at this chart arithmetically or in logarithm. The one major difference here between the two is that in 2008 we hit a peak that we declined from. On this downturn, we have a breakdown though support.

Also worthy of note in the 2008 chart is the angle of ascension, once we hit bottom from there. I would assume once this downturn has hit it's bottom WTI crude would do a similar move up.

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Old January 18th, 2015, 10:30 AM   #78 (permalink)
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e4williams View Post
I have spent 40 minutes on Google trying to find an inverse 1x inverse ETF on WTI crude oil, any recommendations.

40mins??
SCO seems to be what you want.
Crude Oil ETF Database

I don't understand #3 so cant help you there.

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Old January 18th, 2015, 12:32 PM   #79 (permalink)
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Quoting 
2. My price projection for WTI Crude is down to 26 or 28 within two to two and a half months. How best to trade that??
I was just thinking a short EFT 1x, which apparently I am having great difficulty in finding.

You can also look at option strategies against USO, as simple as buying a put, selling (writing) a call, or the various bear vertical spread strategies.

One thing you have to be cautious of is the effect of contango on USO or other commodity ETF, because USO is priced in front month only, so monthly rollover of futures contracts with contango will affect future performance. This article explains the current situation with respect to ETF's based on crude oil ... The Cruel Oil-Market Math Conspiring Against ETF Bulls - Bloomberg


Quoting 
Also worthy of note in the 2008 chart is the angle of ascension, once we hit bottom from there. I would assume once this downturn has hit it's bottom WTI crude would do a similar move up.

A bigger difference today compared to 2008 is the US Dollar. You really need to be comparing the US Dollar against Crude Oil to understand what is happening today. The trade your considering is also a trade on the future price of the US Dollar against the Yen and Euro. Currently we have collapsing global demand, primarily asia, combined with a strong uptrend in the US Dollar. In 2008, we had steady to increasing global demand within an environment of a weak dollar policy in effect whereby the brief dollar rally mid-year quickly reversed back to close the year back below long term support at the 80 level, and thereby allowing oil to reverse trend and rocket higher. So, with that backdrop, unless the dollar trend reverses course, the best oil will be able to do is find a low somewhere and drift sideways in a trading range. With that said, we are now within the window of time that starts a bullish seasonal period for oil, (from mid-January to late April).

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Last edited by trendwaves; January 18th, 2015 at 12:50 PM. Reason: added 10 year CL monthly chart
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Old January 18th, 2015, 01:13 PM   #80 (permalink)
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trendwaves View Post
You can also look at option strategies against USO, as simple as buying a put, selling (writing) a call, or the various bear vertical spread strategies.

One thing you have to be cautious of is the effect of contango on USO or other commodity ETF, because USO is priced in front month only, so monthly rollover of futures contracts with contango will affect future performance. This article explains the current situation with respect to ETF's based on crude oil ... The Cruel Oil-Market Math Conspiring Against ETF Bulls - Bloomberg



A bigger difference today compared to 2008 is the US Dollar. You really need to be comparing the US Dollar against Crude Oil to understand what is happening today. The trade your considering is also a trade on the future price of the US Dollar against the Yen and Euro. Currently we have collapsing global demand, primarily asia, combined with a strong uptrend in the US Dollar. In 2008, we had steady to increasing global demand within an environment of a weak dollar policy in effect whereby the brief dollar rally mid-year quickly reversed back to close the year back below long term support at the 80 level, and thereby allowing oil to reverse trend and rocket higher. So, with that backdrop, unless the dollar trend reverses course, the best oil will be able to do is find a low somewhere and drift sideways in a trading range. With that said, we are now within the window of time that starts a bullish seasonal period for oil, (from mid-January to late April).


all commodity prices were were high for the past 7 years because the dollar was weak. and, now the dollar is back to more normal levels, and commodity prices have adjusted. however, the demand side of the equation is only one part of the story; and in fact, only 44% of the drop in oil prices is attributable to broader demand factors. there has also been a 65% surge in u.s. crude production in the past 4 years, which was driven by new drilling technologies. eventually, falling oil prices will have the effect of reducing supply, and stimulating demand, and oil prices will rebound. therefore, it's wrong to think this is primarily a demand side problem, especially, if you factor in the the saudi's actions. this is an important distinction, because lower oil prices, that result from increased supplies, will likely be supportive of future economic growth.

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