CL Redux
- Thread starter schizo
- Start date
I see that first potential trap. That's where using the 5-min chart to avoid "cheating" keeps you out of a bad counter-trend move. Use a 1-min chart to look inside the 12:55pm ET bull bar's action. Price hits .50, pulls back to the 1-min 20 EMA, and runs up to .50 again. Great "twin top" short signal off highs...if you're a really fast 1-min chart scalper.
If you're playing this thing for runs, you look for with-trend entries until a reversal signal is put in. At the very least, a reversal signal would be a break of the 5-min bull bar's low, which never happens. However, there is a break of the 3-min bear bar low; that's the trap for those who cheat (I learned all this through the school of hard knocks, by the way, not by reading Al Brooks' book; though I must say when it happened to me a few times my first thought was "Ahhh, THAT'S what Al means by 'trapped traders'.")
So the cheaters get trapped short @ 88.34 or so and you buy 88.47 off the 1-min chart, look for a break of .50 and hold for a new breakout as long the trap low isn't violated.
On your second trap example, I'm not sure I understand what you mean by shorts trapped @ 88.40. Price dipped to 88.25, so anyone who shorted @ 88.40 had plenty of room to escape unscathed.
If you're referring to traders who shorted off the 88.49 pivot just below the 1-min 20 EMA without waiting for any confirmation whatsoever, then they were, indeed, trapped. I used this setup to go long @ 88.50 (break of the .49 triple-touch on the 1-min chart). I felt this was a very edgy trade in light of the price action, but support @ .25 was established at a Paleolithic trend line (I hope tomahawk reads this and has a good laugh), and if price didn't break .57 out of the gate, I'd bail, so I considered it worth a try.
Here is one possible explanation.
few days ago April/March spread peaked at $4.25 , today what at $2.75 level ??
$4.25 spread is the day I posted about
- Renting a tanker along with "Buy March/Sell April "
- take March delivery , store it for a cost of $1 for one month
- and deliver for April contract
and pocket $3.25 profit , that is $3250 per contract , for 1000 contracts ( small tanker ) profit is $3.25 millions
for this reason I posted , that spread will diminish at least by $1 to $3.25 , now we are even below that
Here is why the spread is diminishing last 2 days ( and may diminish more based on Friday events .. )
- actual physical crude oil delivary is 1 month after the contract expire , now with the new tensions in Suez/Iran , 1 month from now the actual physical delivary time OIL may be in better demand not withstanding this ' consumer oil demand /economoy' slow growth etc..
- few days ago with out Suez/Iran moving and Egypt settled oil might looked little bearish from economic growth etc.. factors , but now with this new situation it is no longer especially MARCH crude is not that BAD (not $4 less worth) compared to APRIL....
---
For these reason I suggested if somebody is keeping positions overnite Asian session
- if you SHORT have APRIL contract
- if you are LONG have MARCH contract
just this choosing right month ( especially after spread reaching $4 ) caused 50 ticks profit . Our resident BEAR @schizo left 50 tick profit on table for having Short MARCH instead of APRIL especially after spread reaching $4 ...
guys $4 spread is loooo...oots of money for 1 month delivery difference , the average monthly spread is $1.5 ....
few days ago April/March spread peaked at $4.25 , today what at $2.75 level ??
$4.25 spread is the day I posted about
- Renting a tanker along with "Buy March/Sell April "
- take March delivery , store it for a cost of $1 for one month
- and deliver for April contract
and pocket $3.25 profit , that is $3250 per contract , for 1000 contracts ( small tanker ) profit is $3.25 millions
for this reason I posted , that spread will diminish at least by $1 to $3.25 , now we are even below that
Here is why the spread is diminishing last 2 days ( and may diminish more based on Friday events .. )
- actual physical crude oil delivary is 1 month after the contract expire , now with the new tensions in Suez/Iran , 1 month from now the actual physical delivary time OIL may be in better demand not withstanding this ' consumer oil demand /economoy' slow growth etc..
- few days ago with out Suez/Iran moving and Egypt settled oil might looked little bearish from economic growth etc.. factors , but now with this new situation it is no longer especially MARCH crude is not that BAD (not $4 less worth) compared to APRIL....
---
For these reason I suggested if somebody is keeping positions overnite Asian session
- if you SHORT have APRIL contract
- if you are LONG have MARCH contract
just this choosing right month ( especially after spread reaching $4 ) caused 50 ticks profit . Our resident BEAR @schizo left 50 tick profit on table for having Short MARCH instead of APRIL especially after spread reaching $4 ...
guys $4 spread is loooo...oots of money for 1 month delivery difference , the average monthly spread is $1.5 ....
IV, didn't know if you saw this. I know you're interested in this.
http://en.wikipedia.org/wiki/West_Texas_Intermediate
Anomaly in 2007
WTI usually commands a higher price than Brent crude does, but on May 24, 2007, WTI was priced at $63.58 per barrel as against $71.39 per barrel for Brent (Bloomberg). The anomaly occurred perhaps because of a temporary shortage of refining capacity. On April 13, WTI Crude at Cushing may have temporarily lost its status as a barometer of world oil prices. A large stockpile of oil at the Cushing, Oklahoma storage and pricing facility (mainly due to a refinery shutdown caused price to be artificially depressed at the Cushing pricing point. As stockpiles decreased, the WTI price increased to exceed the price of Brent once again.
Anomaly in 2011
In Feb. 2011, WTI was trading around $85/barrel while Brent was at $103/barrel. The reason that most cite for this anomaly is that Cushing has reached capacity, depressing the oil market in North America which is centered on the WTI price. However, Brent is moving up in reaction to civil unrest in Egypt and across the Middle East. Since stockpiles at Cushing cannot be easily transported to the Gulf Coast for export, WTI crude is unable to be arbitraged in bringing the two back into parity. This large spread is likely to continue until unrest across the middle east subsides or fleets of trucks start hauling oil from Cushing,OK to Port Arthur,TX.
Courtesy of OddTrader http://www.elitetrader.com/vb/showthread.php?threadid=215486
http://en.wikipedia.org/wiki/West_Texas_Intermediate
Anomaly in 2007
WTI usually commands a higher price than Brent crude does, but on May 24, 2007, WTI was priced at $63.58 per barrel as against $71.39 per barrel for Brent (Bloomberg). The anomaly occurred perhaps because of a temporary shortage of refining capacity. On April 13, WTI Crude at Cushing may have temporarily lost its status as a barometer of world oil prices. A large stockpile of oil at the Cushing, Oklahoma storage and pricing facility (mainly due to a refinery shutdown caused price to be artificially depressed at the Cushing pricing point. As stockpiles decreased, the WTI price increased to exceed the price of Brent once again.
Anomaly in 2011
In Feb. 2011, WTI was trading around $85/barrel while Brent was at $103/barrel. The reason that most cite for this anomaly is that Cushing has reached capacity, depressing the oil market in North America which is centered on the WTI price. However, Brent is moving up in reaction to civil unrest in Egypt and across the Middle East. Since stockpiles at Cushing cannot be easily transported to the Gulf Coast for export, WTI crude is unable to be arbitraged in bringing the two back into parity. This large spread is likely to continue until unrest across the middle east subsides or fleets of trucks start hauling oil from Cushing,OK to Port Arthur,TX.
Courtesy of OddTrader http://www.elitetrader.com/vb/showthread.php?threadid=215486
Thanks for the compliment
. Truth be told, I'm more concerned about getting the direction correct and capturing as much of the ensuing trend as possible than about spreads. On that note, I'm happy to report that I've done quite well recently.BTW it's not entirely fair to single me out as a resident bear. After all, I've been long since 88.07. Ya go bulls!
Short 8925
Iranian warships sailing through Suez poses prickly decision for Egypt
http://www.cnn.com/2011/WORLD/meast/02/17/egypt.iran.warships/index.html?hpt=T2
The frigate Alvand, pictured in 2009, is one of the two ships Iran wants to send through the Suez Canal.
STORY HIGHLIGHTS
Iran has submitted a request for two ships to sail through the Suez Canal
Egypt is bound by a treaty to allow them to pass
But Israeli Foreign Minister Avigdor Liberman calls it an act of provocation
The situation could further escalate tensions in the region
(CNN) -- Iran has submitted an official request for two of its warships to sail through the Suez Canal, an Egyptian official told CNN Thursday, in a move that puts Egypt's new military regime in a prickly position with Israel.
The post-Hosni Mubarak caretaker government must decide whether to give a green light to the Iranian warships, believed to be the first that would sail through the Suez since the Islamic republic's 1979 revolution.
The Egyptian official told CNN that permission will likely be granted. But Egypt might find itself in muddy water over the Suez.
The canal is an internal body of water and as such, Egypt has sovereignty over it. But Egypt also is bound by the 1976 Camp David Accords, which guaranteed the right of free passage by ships belonging to Israel and all other nations on the basis of the Constantinople Convention of 1888. Before that, Egypt did not allow Israeli ships to sail through the canal.
Last week, Egypt's military government said it would honor all its international treaties. That would include Camp David.
Now it finds itself in the position of allowing ships belonging to the sworn enemy of its peace treaty partner to sail through.
"This is awkward -- at a minimum," said David Schenker, director of the Program on Arab Politics at the Washington Institute for Near East Policy.
http://www.cnn.com/2011/WORLD/meast/02/17/egypt.iran.warships/index.html?hpt=T2
The frigate Alvand, pictured in 2009, is one of the two ships Iran wants to send through the Suez Canal.
STORY HIGHLIGHTS
Iran has submitted a request for two ships to sail through the Suez Canal
Egypt is bound by a treaty to allow them to pass
But Israeli Foreign Minister Avigdor Liberman calls it an act of provocation
The situation could further escalate tensions in the region
(CNN) -- Iran has submitted an official request for two of its warships to sail through the Suez Canal, an Egyptian official told CNN Thursday, in a move that puts Egypt's new military regime in a prickly position with Israel.
The post-Hosni Mubarak caretaker government must decide whether to give a green light to the Iranian warships, believed to be the first that would sail through the Suez since the Islamic republic's 1979 revolution.
The Egyptian official told CNN that permission will likely be granted. But Egypt might find itself in muddy water over the Suez.
The canal is an internal body of water and as such, Egypt has sovereignty over it. But Egypt also is bound by the 1976 Camp David Accords, which guaranteed the right of free passage by ships belonging to Israel and all other nations on the basis of the Constantinople Convention of 1888. Before that, Egypt did not allow Israeli ships to sail through the canal.
Last week, Egypt's military government said it would honor all its international treaties. That would include Camp David.
Now it finds itself in the position of allowing ships belonging to the sworn enemy of its peace treaty partner to sail through.
"This is awkward -- at a minimum," said David Schenker, director of the Program on Arab Politics at the Washington Institute for Near East Policy.
Bahrain: What's at stake for America
http://www.cnn.com/2011/US/02/17/us.bahrain.stakes/index.html
Bahrain has been ruled by a Sunni Muslim royal family since the British left in 1971. Two-thirds of its population are Shiites. While the latest turmoil is largely a reaction to uprisings in Egypt, Tunisia, and elsewhere, younger Shiites have routinely led protests -- often violent -- to complain about discrimination, unemployment and corruption.
They also rioted when the Islamic Revolution toppled the Shah of Iran in 1979. Since then, every time Shiite protests have become too heated, the Sunni rulers of Saudi Arabia have quietly sent troops into the country, according to Rubin.
"On the one hand, Bahrain is a flash point between the United States and Iran," he told CNN. On the other, it's "a flash point between Saudi Arabia and Iran."
Bahrain was actually a Persian province through the 16th century. Iran claimed the territory when the Britain left, but the Bahrainis opted for independence.
Iran "Bahrain is Iran's Kuwait," Rubin said, referencing former Iraqi strongman Saddam Hussein's insistence that Kuwait was rightfully an Iraqi province.
If Bahrain's government falls, "there is no question -- no ifs, ands or buts -- Bahrain would become an Iranian satellite, and the Fifth Fleet would be sent packing," Rubin predicted.
The Obama administration is "not being too vocal on the riots in Bahrain because it's pretty much the one country where we can't afford regime change," he said.
Could U.S. officials find a new naval home in the Gulf? Possibly Qatar or the United Arab Emirates, Rubin said, but "if there's a sense that the dominoes are falling and the United States is the big loser, then all the regional states are going to make their accommodation with Iran whether they like us or not."
http://www.cnn.com/2011/US/02/17/us.bahrain.stakes/index.html
Bahrain has been ruled by a Sunni Muslim royal family since the British left in 1971. Two-thirds of its population are Shiites. While the latest turmoil is largely a reaction to uprisings in Egypt, Tunisia, and elsewhere, younger Shiites have routinely led protests -- often violent -- to complain about discrimination, unemployment and corruption.
They also rioted when the Islamic Revolution toppled the Shah of Iran in 1979. Since then, every time Shiite protests have become too heated, the Sunni rulers of Saudi Arabia have quietly sent troops into the country, according to Rubin.
"On the one hand, Bahrain is a flash point between the United States and Iran," he told CNN. On the other, it's "a flash point between Saudi Arabia and Iran."
Bahrain was actually a Persian province through the 16th century. Iran claimed the territory when the Britain left, but the Bahrainis opted for independence.
Iran "Bahrain is Iran's Kuwait," Rubin said, referencing former Iraqi strongman Saddam Hussein's insistence that Kuwait was rightfully an Iraqi province.
If Bahrain's government falls, "there is no question -- no ifs, ands or buts -- Bahrain would become an Iranian satellite, and the Fifth Fleet would be sent packing," Rubin predicted.
The Obama administration is "not being too vocal on the riots in Bahrain because it's pretty much the one country where we can't afford regime change," he said.
Could U.S. officials find a new naval home in the Gulf? Possibly Qatar or the United Arab Emirates, Rubin said, but "if there's a sense that the dominoes are falling and the United States is the big loser, then all the regional states are going to make their accommodation with Iran whether they like us or not."
At one time (and maybe still today) the TED spread -- T-Bills vs Eurodollars -- was a barometer of how the world felt about political risk. When the spread was tighter the world was sanguine ... as the rates in Europe incresed it was a reflection of perceived risk.
Clearly the Brent/WTI equation is the barometer for at least the Middle East. Hard to come from a 14th century political and social structure to modernity.
Clearly the Brent/WTI equation is the barometer for at least the Middle East. Hard to come from a 14th century political and social structure to modernity.