Out CL @ 70.78. Profit = $280 per contract.
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Adventures in Trading with a Killer
- Thread starter Hedge Fund Killer
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Yesterday, in the Asian market, I saw 70.40 get taken out. In fact, CL traded as low as 70.26, which is the 38.2% retracement of the move from 67.63 to 71.89. However, fortuity shined down upon me and gave me the opportunity to extricate myself from my long at 70.50 with a small profit. In addition to my long at 70.50, I also closed out my long at 68.04. Since my premise is amiss, I now believe that further corrections await CL in the near term. Why? First, the market rarely ever just corrects 38.2%, then resumes the trend. In most cases, we see retracements of 68.2%. The second most often seen retracement is 50%. Second, OPEC and other oil producing countries are scheduled to meet on June 20-21 in Vienna. Thus, we have to wait five weeks for a fundamental catalyst. If CL follows the pattern that it did in the last OPEC meeting on April 20, 2018, then CL will acquire a bid tone two weeks ahead of the meeting in Vienna. That leaves us with three weeks where CL will be exposed to sell orders that could potentially see CL fall further than 70.26.
In the above, 68.2% should be 61.8%. Sorry. Sometimes in my haste to elucidate, I make a mistake.
Short HG @ 3.0630.
Short HG @ 3.0630.
Out HG @ 3.0530. Profit = $250 per contract.Short HG @ 3.0630.
Yesterday, in the Asian market, I saw 70.40 get taken out. In fact, CL traded as low as 70.26, which is the 38.2% retracement of the move from 67.63 to 71.89. However, fortuity shined down upon me and gave me the opportunity to extricate myself from my long at 70.50 with a small profit. In addition to my long at 70.50, I also closed out my long at 68.04. Since my premise is amiss, I now believe that further corrections await CL in the near term. Why? First, the market rarely ever just corrects 38.2%, then resumes the trend. In most cases, we see retracements of 68.2%. The second most often seen retracement is 50%. Second, OPEC and other oil producing countries are scheduled to meet on June 20-21 in Vienna. Thus, we have to wait five weeks for a fundamental catalyst. If CL follows the pattern that it did in the last OPEC meeting on April 20, 2018, then CL will acquire a bid tone two weeks ahead of the meeting in Vienna. That leaves us with three weeks where CL will be exposed to sell orders that could potentially see CL fall further than 70.26.
Depends on where you measure from, but historically speaking if the 38% holds? this would imply momentum is strong or weak depending on direction price. Same goes if the replacements are deep, than it will be harder for price to get out of the trenches to make new highs. Not saying it wont make new highs, just that the resistance is greater.
Zodiac, you have a valid view point. Thank you for making a positive contribution to my journal and conducting yourself in a professional manner.Depends on where you measure from, but historically speaking if the 38% holds? this would imply momentum is strong or weak depending on direction price. Same goes if the replacements are deep, than it will be harder for price to get out of the trenches to make new highs. Not saying it wont make new highs, just that the resistance is greater.
No trading today. I spent the trading day observing the markets, in particular, I kept a watchful eye on CL. Thus, the trading day was not nugatory. Today, CL broke through 71.92 to reach a high of 72.30 before falling to 71.09. Price action in the past week is commensurate with a market that is in a non-trending market. Price action confirms my belief that the market is taking a wait-and-see approach before the OPEC meeting in Vienna on June 20-21. As I mentioned in a prior post, I don't expect CL to acquire a bid tone until two weeks before this OPEC meeting. However, there are opportunities to make a remunerative trade; unfortunately, you just won't be able to position trade. This is where flexibility in one's general trading style is required if one is generally a position trader. I believe that today's price action opens up a stronger possibility for 70.26 to be taken out. Like today's price action, if 70.26 is taken out, it will just be ephemeral. Thus, the trader can expect a bounce back into the trading range for the past week. I draw inspiration from the sixth century BC Chinese Philosopher Sun Tzu who said, "Every battle is won before it is fought." We traders can win the battle if we not only interpret price action well, but also anticipate price action well.
Trading is personal, every one has there own style of trading. I don't see a lot of value in spending to much time in the analysis dept. Its like choosing to drink one beer over another. Its a personal flavor thing. But regarding not expecting CL to acquire a bid tone until two weeks before this OPEC meeting, you might be right on with that logic. The daily closes are showing weakness. There are some visual indicators showing signs of weakness as well. Pause or pullback? Who knows, just keep a keen eye on momentum. You don't have to be a position trader to make money on this beast.
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