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Sweet, sweet Oil

  • #521
  • Aug 19, 2019 2:42pm Aug 19, 2019 2:42pm
That's pretty interesting Ef5 - and yeah that's obviously bearish, right? Or can that mean either? I don't follow futures markets very closely, although I should.

To me, fundamentals and technicals are pointing downward. The only thing that worries me is instability in the middle east, ahem, Iran and Trump. I'll take that bet for now, however:
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  • #522
  • Edited 7:56pm Aug 19, 2019 7:35pm | Edited 7:56pm
Quoting vpn
and yeah that's obviously bearish, right?
Yes it's bearish. Backwardation means that investors are not putting any premium on the contracts with expiration dates further out. That pretty much means that the market isn't worried about uncertainty in time, more than they are the global slowdown.

Quoting vpn
The only thing that worries me is instability in the middle east, ahem, Iran and Trump.
This is where the risk is in shorting oil IMO. The risks seem to be subsiding recently but there's still some back and forth going on between the US and Iran. Iran warns U.S. against seizing released Iranian oil tanker
We must learn who is gold, and who is gold plated
EventsTrader Live All Time Return: 54.4%
  • #523
  • Aug 19, 2019 7:54pm Aug 19, 2019 7:54pm
Quoting vpn
That's pretty interesting Ef5 - and yeah that's obviously bearish, right? Or can that mean either?
On the surface, it isn’t really bullish or bearish. The market thinks spot oil will be lower in the future. If spot oil is at 55 now and the Jan 21 contract is at 50, if you trade that contract you’re just betting spot will be trading higher or lower than 50 at that point in time.

At a higher level, when oil is in backwardation you tend to be able to make money from going long further out contracts. If you buy the Jan 21 contract, then spot oil needs to go from 55 now to below 50 for you to lose on the trade. If spot just stays at 55 then eventually the Jan 21 contract has to move up to 55 and you make 10%. Likewise, while oil is in contango you tend to be able to make money shorting. PIMCO says this is one of the best predictors of return.

the shape of the oil curve has historically been one of the best predictors of future returns, so the move to backwardation has significant implications for commodity investors. For example, subsequent four- and 12-week returns for long oil futures positions in backwardated oil markets have averaged 1.3% and 2.9%, respectively, compared with returns of -1.7% and ‑3.8% for the same periods during contango markets.


Source: https://blog.pimco.com/en/2017/10/oi...-for-investors
Self-sufficiency is the greatest of all wealth. - Epicurus
  • #524
  • Aug 19, 2019 11:09pm Aug 19, 2019 11:09pm
Quoting Goat
We might be opening higher from this Iran stuff over the weekend!! {quote} You're on your own with the straddles but I'll be cheering from the sidelines! I haven't thrown an order into a explosive market since getting burned on a fed statement back in 2009. Scars man, scars.
Sounds like it got ugly. I have not gotten into the data yet but I plan on doing some prep for Wednesday soon. The play right now it just to capture any significant deviation from expectations.
  • #525
  • Edited 2:56am Aug 20, 2019 2:45am | Edited 2:56am
I know this data is going to rock the market tomorrow, but I'm holding on to my long for dear life.
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I have a profit target at 57.50, hoping to catch the spike up. Here's my crack analysis....
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Next one will land on green!
  • #526
  • Aug 20, 2019 7:59am Aug 20, 2019 7:59am
Quoting Goat
I know this data is going to rock the market tomorrow, but I'm holding on to my long for dear life.
I'm on the other side of your trade since my short was filled overnight:
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ONLY ONE OF US WILL COME OUT ALIVE!
  • #527
  • Aug 20, 2019 12:01pm Aug 20, 2019 12:01pm
Quoting vpn
{quote}I'm on the other side of your trade since my short was filled overnight: {image} ONLY ONE OF US WILL COME OUT ALIVE!
I just doubled down. Anyone else in on that w/me?
  • #528
  • Aug 20, 2019 3:00pm Aug 20, 2019 3:00pm
Quoting vpn
{quote} I just doubled down. Anyone else in on that w/me?
I would but I'm not a big fan of CFDs and the ETF market is closing.

I will probably be shorting tomorrow depending on what the landscape looks like. If you are still in the trade I'll root alongside you.
  • #529
  • Aug 20, 2019 4:31pm Aug 20, 2019 4:31pm
Quoting vpn
{quote} I just doubled down. Anyone else in on that w/me?
Was that CL? Last trade on the Sept contract was today so I hope you were on Oct.
Self-sufficiency is the greatest of all wealth. - Epicurus
  • #530
  • Aug 20, 2019 5:57pm Aug 20, 2019 5:57pm
Well API was not quite what I thought it would be today, thankfully I stayed away.

Quoting Goat
I know this data is going to rock the market tomorrow, but I'm holding on to my long for dear life.
The data tomorrow may be less tradable than I initially thought. If the API numbers were any indication the forecasts are somewhat in line this week and inventories will not have a large draw or build.

However, my prediction is that tomorrow we will see a draw of somewhere around 4M crude barrels which would cause a mild spike up in WTI. Depending on how the market opens in the morning I will be placing a buy with a moderately tight stop and closing my position before noon.
  • #531
  • Aug 20, 2019 6:02pm Aug 20, 2019 6:02pm
Quoting helgastrxd
Well API was not quite what I thought it would be today, thankfully I stayed away. {quote} The data tomorrow may be less tradable than I initially thought. If the API numbers were any indication the forecasts are somewhat in line this week and inventories will not have a large draw or build. However, my prediction is that tomorrow we will see a draw of somewhere around 4M crude barrels which would cause a mild spike up in WTI. Depending on how the market opens in the morning I will be placing a buy with a moderately tight stop and closing my position...
It seems like the liquidity this week will be light leading up to Jackson Hole's big day on Friday when Powell will speak. But the inventory data always has high impact. I'd expect significant moves on the data tomorrow.
We must learn who is gold, and who is gold plated
EventsTrader Live All Time Return: 54.4%
  • #532
  • Aug 20, 2019 6:13pm Aug 20, 2019 6:13pm
Quoting vpn
ONLY ONE OF US WILL COME OUT ALIVE!


Good luck to you sir. I can't root against a fellow trader, so my only hope is that the market will spike up, click off my profit target, then headed in your direction.

I guess we'll see in about 15 hours!
  • #533
  • Aug 20, 2019 6:23pm Aug 20, 2019 6:23pm
I’m expecting oil to rise maybe around 64.00 from there double top and drop.

Take a look at USDCAD that thing looks like it’s about to melt which would of course give the bullish bias up to 64.00 for oil
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  • #534
  • Aug 20, 2019 6:31pm Aug 20, 2019 6:31pm
Quoting Neil0163
I’m expecting oil to rise maybe around 64.00 from there double top and drop. Take a look at USDCAD that thing looks like it’s about to melt which would of course give the bullish bias up to 64.00 for oil {image}
You're the first guy I've run into around here who shares my long bias (over the next few weeks at least). Thanks for making me feel less crazy.

Is your analysis 100% technical, or do you have other info built in?
  • #535
  • Aug 20, 2019 8:37pm Aug 20, 2019 8:37pm
Although it seems to be drifting higher, we could remain in a relatively tight range until tomorrow's EIA Inventory data.
We must learn who is gold, and who is gold plated
EventsTrader Live All Time Return: 54.4%
  • #536
  • Aug 20, 2019 11:27pm Aug 20, 2019 11:27pm
Yeah definitely drifting higher, but I wonder how significant it is. Do you have the futures volume over the last hour you could post? My data subscription is having troubles at the moment.
  • #537
  • Aug 21, 2019 1:28am Aug 21, 2019 1:28am
Quoting Goat
Yeah definitely drifting higher, but I wonder how significant it is. Do you have the futures volume over the last hour you could post? My data subscription is having troubles at the moment.
This is the volume for the CME CL front-month on an hourly chart and 15M chart, respectively.
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We must learn who is gold, and who is gold plated
EventsTrader Live All Time Return: 54.4%
  • #538
  • Aug 21, 2019 2:06am Aug 21, 2019 2:06am
Quoting EventsTrader
{quote} This is the volume for the CME CL front-month on an hourly chart and 15M chart, respectively. {image}{image}
My man! Thanks EventsTrader!

Volume looks super weak, the drift means nothing.

On the other hand, volume on that spike down to 55.30 looks heeeavy. Um yeah, I'm about ready to get out of my long.
  • #539
  • Aug 21, 2019 3:08am Aug 21, 2019 3:08am
The 20 cent range is holding strong. We all wait.
  • #540
  • Aug 21, 2019 3:22am Aug 21, 2019 3:22am
Quoting Goat
{quote} You're the first guy I've run into around here who shares my long bias (over the next few weeks at least). Thanks for making me feel less crazy. Is your analysis 100% technical, or do you have other info built in?
Haha cheers buddy, I gave up listening to people of FF with there analysis I just like marking charts up and sharing thoughts, everything is purely based of technical analysis I use structure, Fibonacci, Fibonacci inversion and psychology levels not a care in the world for any media/news hype.
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