CL Redux

[saliva]

Quote from saliva:

Flip short 78.05

A confusing day yet again.

Will hold this over the weekend with the stop just over 79. I know, that's a bit wider than my usual comfort zone but I'm holding only 4 lots. Hopefully, it will reach my ultimate target of low 74-ish. (Since different charts give different number, I can only generalize that the slide will end somewhere between 73 and 75.)

On a related note to my previous post, one other observation duly noted is that CL, despite its messy moves, tends to move in a (semi-) predictable manner from one major pivot to another. Even with all the whipsaws, it will eventually get to its destination. The question is just how long is "eventually"?

 

[Speciaul_K]

Quote from saliva:

Will hold this over the weekend with the stop just over 79. I know, that's a bit wider than my usual comfort zone but I'm holding only 4 lots. Hopefully, it will reach my ultimate target of low 74-ish. (Since different charts give different number, I can only generalize that the slide will end somewhere between 73 and 75.)

On a related note to my previous post, one other observation duly noted is that CL, despite its messy moves, tends to move in a (semi-) predictable manner from one major pivot to another. Even with all the whipsaws, it will eventually get to its destination. The question is just how long is "eventually"?

You can always piece out your stops. The way the markets been trading it looks like alot of people went short into the weekend in CL and ES. This week looks bearish if you use a candlestick method.

 

[EON Kid]

Quote from saliva:

or, worse, get out too early only to see the market continue without me. So in disgust I dash back in but then what do you know? The damn thing reverses on me.

I have seen you do this a few times. You should never chase the market even when you have exited early and assume a strong continued move. Always wait for some pullback, always demand a discount.

Flip the coin Saliva, if you’re a pro, the 'chasing retail' stop (your stop) is what they are after. Your entry should therefore be on the pullback that gets most retail stops.

1)You have to be able to see the sweet spots, zones where stops will be concentrated.

2)You have to judge the supply and demand in a pullback leg, or is the move generating more initiative (supply)/demand.

3)You have to see macro forces that will also influence the pull back (the most basic being major support, resistance or TL, but there are also….. and… and… and so on) That is why some pullbacks (price swings) go further than others even though they show the same tell tale signs of weakness at the start.

and so on and so forth.

Lastly you will have an idea of what to expect in most moves, most waves, primary/secondary or retrace - as one is just the continuation of the other, so spotting when one is outside what you expect is just as important as seeing when its is conforming to what you expect. Your scenario will therefore adapt to what you observe.

Sorry don’t mean to teach grandpa to suck eggs.

 

[bridenour]

I'm expecting a slight run up in crude to 79 - 79.50...maybe even test 80....if it does I will get short in a big way and hope to ride down to $75.


Lets see...i'll be surprised if it just continues straight down without any retrace.

 

[saliva]

Quote from EON Kid:

I have seen you do this a few times. You should never chase the market even when you have exited early and assume a strong continued move. Always wait for some pullback, always demand a discount.

Flip the coin Saliva, if you’re a pro, the 'chasing retail' stop (your stop) is what they are after. Your entry should therefore be on the pullback that gets most retail stops.

1)You have to be able to see the sweet spots, zones where stops will be concentrated.

2)You have to judge the supply and demand in a pullback leg, or is the move generating more initiative (supply)/demand.

3)You have to see macro forces that will also influence the pull back (the most basic being major support, resistance or TL, but there are also….. and… and… and so on) That is why some pullbacks (price swings) go further than others even though they show the same tell tale signs of weakness at the start.

and so on and so forth.

Lastly you will have an idea of what to expect in most moves, most waves, primary/secondary or retrace - as one is just the continuation of the other, so spotting when one is outside what you expect is just as important as seeing when its is conforming to what you expect. Your scenario will therefore adapt to what you observe.

Sorry don’t mean to teach grandpa to suck eggs.

Thanks man, I appreciate them words. Although I myself know them by heart, it's always refreshing to hear them from others. No worries though, I'll get over it. After trading ES for the last 10 years, I guess I wanted to get my toes wet in this new instrument if you will. The price moves are much more sporadic here than in ES and I need to recalibrate my system.

Do keep those constructive criticisms coming as I obviously will trip and fall a few more times going forward.

 

[saliva]

Quote from bridenour:

I'm expecting a slight run up in crude to 79 - 79.50...maybe even test 80....if it does I will get short in a big way and hope to ride down to $75.


Lets see...i'll be surprised if it just continues straight down without any retrace.

I might be wrong on this, but with the February contract to be expired next Wednesday, does it not make it more sense to bring this baby down so the locals can pick it up on the cheap?

 

[Speciaul_K]

Quote from bridenour:

I'm expecting a slight run up in crude to 79 - 79.50...maybe even test 80....if it does I will get short in a big way and hope to ride down to $75.


Lets see...i'll be surprised if it just continues straight down without any retrace.

This sounds like ealier this week when it broke 8150 and everyone wanted to wait till it came back up to 8150 before they got short. Same as when it was sitting at 8000, seemed no one wanted to short it there. The thing with trading crude is you have to anticipate the move insteading of seeing the move then waiting for the day it comes back and hoping it repeats the move. Your just giving your money away if the market went up 2$ on monday (full reversal) and your trying to fade it.

 

[bridenour]

Interesting special k.


I haven't been trading crude long. Maybe 3 or 4 months in any sort of serious way.

The thing i did notice during this time frame was that there occurred three serious, nearly continuous, directional moves with very little retracement, particularly in the earlier stages of the move.


I was thinking this was just a fluke (in fact, two of those moves contained the "most consecutive up-days or down days" in 10 or 20 years, so they were definitely exceptional moves.


But, are you saying that when crude starts a significant directional move one can generally expect little retracement?

 

[Speciaul_K]

I cannot say that no retracement is always the case. The times I look for retracement is when a trend starts to breaks down. (Look at 1/8 & 1/11) I guess what im trying to get across is that crude will trade a direction for several days or weeks. Typically a 5-10$ move.
I agree with you that when a major move starts there is little retracement.
Overall it just seems that people sit out sometimes because they want a big pullback which may never happen.

Quote from bridenour:

Interesting special k.


I haven't been trading crude long. Maybe 3 or 4 months in any sort of serious way.

The thing i did notice during this time frame was that there occurred three serious, nearly continuous, directional moves with very little retracement, particularly in the earlier stages of the move.


I was thinking this was just a fluke (in fact, two of those moves contained the "most consecutive up-days or down days" in 10 or 20 years, so they were definitely exceptional moves.


But, are you saying that when crude starts a significant directional move one can generally expect little retracement?

 

[bridenour]

Thanks, thats helpful insight. Haven't been watching it that long so i thought it was something of a fluke.

I am looking for a bottom between 70 and 75, but i think i'll sit out the downswing and look to get long at a lower price. unless there is a major change in the dynamics of crude, any price decrease is likely to be temporary.

For now the path of least resistance on a medium-term basis is probably still up.