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Tricky situation to start the week. Big impulse move overnight. I expect more movement to the upside. However, there is a lot of space to the downside that could be tested before that happens. The trick will be to determine when the retracement is over and the resumption has begun. There are some high volume traded prices at 49.56 and 49.45. These could be stopping points.
To the upside we have retraced the down move from 5/31 so there is a chance the up move is over for a while.
Mid day update: Price could not break through the top congestion and has now test the early morning break out. Could be a bounce here. Otherwise there are a couple more targets below.
Update, end of day: the bounce happened, as anticipated
Can you help answer these questions from other members on NexusFi?
I benefited from a mistake this morning on my only trade so far. Accidentally entered with three contracts (left over setting from replay on the weekend), and was able to shed two at +5t. The third was BE. Total +10t.
The entry was a BO of a short pause after a larger impulse move. @KahunaDog would probably say it was a late entry, which I would not disagree with. However, I could not find a way to enter with confidence down around the 49.50 area, and I did not want to take a break out trade until price cleared some heavily traded areas below the OR top.
It was the type of trade that could have run for a while coming out of the large consolidation area, but didn't.
Like anything in trading there is a time for all styles. The conditions for break out trading oil are not right all the time, but when there is energy in the market, with liquidity waiting at distant levels, it will often move away from entry rapidly with momentum carrying price great distances. Natural gas and gold are like that as well. Instruments like ES tend to do a lot of back filling making break out trading more difficult. I try not to just take any ol' breakout, but choose the conditions where I think there is potential for an explosive move (could do better admittedly).
That said, I am working on ways to enter earlier within my risk tolerance. I can envision a day where I scale in on a pull back then add on the breakout.
Price broke 16 ticks above the high for the year in the early morning. We could have a trend day up if it holds above 50.21. It may need some more fuel so it would not surprise to have it retrace to the 50.00 area and retest the early move up.
To the downside I need to be ready for a sell off from this top because there are lots of areas below that have not been touched.
Update: First trade was on and stopped at BE. It made it to 13 ticks and the top before reversing. Was playing for an opening range move out the top but didn't materialize.
Update Mid day: the 50.00 area held for a couple of bounces. Price currently above the main resistance area of yesterday, now support. 2 trades for +5t total. Both reach 1R, so that's positive. Recent lackluster days making trading tough.
Update, end of day. Price did end up breaking up near the close.
Once again the best move so far happened in the overnight. Time will tell if price will continue its upward drive.
If it does it could happen from here or at any number of points of heavily traded prices that will act as support. The tricky part on days like today is figuring out when the retracements are over. This is where someone with a large account and scaling in can be an advantage, but that is not me. So, I will have to wait for signs to determine when the next move is taking place. These signs include: accumulation around a specific price, higher lows, impulse moves in direction of trend, some sort of CD event.
To the downside I will have to see some pretty good evidence that the market is attacking lower prices to take a short.
Oil inventory day could shake things up a bit as well.
3 for 5 in getting to 1R but not much further. CL continues to range each day making catching runners difficult. Since I am tending to enter at the edges I won’t get much more than 1R until price decides to move. The overnight action has been strong with consolidation later. Very tricky trading lately.
You are correct, Ideally I would like to enter positions well before breakouts, and am working on ways to find those areas. Took one today on a retrace to consolidation.
I would be interested in hearing more of your thoughts on market direction and institutional influence, via PM if that is more suitable.
I start the day with a short bias. Once again price made a 100 tick move overnight. Time will tell if this sell off will continue during RTH or we consolidate in a range like previous days. For now I'll be looking to find an entry that plays a continuation down. There is a lot of room to the down side that has not been tested so a trend day is possible.
That said I need to be nimble and ready for clues in both directions because the overnight move needs some testing too.
Update, end of day: No combine trades today but gaining confidence in my blueprint reads. Uncanny how price returns to breakout areas and to areas of high volume trade. Today after bounce off the first support area identified the market returned to the first resistance area identified, with a pause at a high volume area that developed during market hours.
