He's referring to those countries economies being tied to the commodities they produce to such a large extent that their currencies are also coupled indirectly.
CL Redux
- Thread starter schizo
- Start date
He's referring to those countries economies being tied to the commodities they produce to such a large extent that their currencies are also coupled indirectly.
Couple contracts for sale at 83.48 about 1170 of them. Could be trying to shake weak longs or someone wants to see prices lower
Quote from schizo:
Thanks for the explanation. But does it really matter when they all move in tandem? For instance, look at the Canadian dollar (6C) in relation to $SPX and CL.
Norman Shey was right. That's what I meant.
You are correct about ES. I was thinking of 2 different things when I wrote that. The crude observation was in reflection of different currency pairs, not ES. Crude is an indication of the strength of the US economy, but at it's extreme it is also indicative of inflation/deflation and it's affect on the USD against other pairs. That's where I was thinking and made the f'k-up. My apologies for the misstatement/incorrect comment.
Another note, it hit 83.75 like you observed.
now trading CL and ES side by side, I'd opine the CL leads ES movement more than not. All markets alike are push=pulled by the USD against real currency markets. Quasi currencies like Oil and Gold futures flex first, because they are directly hedged=priced by USD values.
next comes the stock index futures, which are part independent to stock news - earnings - etc and also part of the carry-trade. They flex next to the USD dog shaking its coat free of mud. Often (not always) we will see the CL make a spike or drop, then seconds to minutes later the S&P will mirror perfectly.
if only it were that simple all the time... everyone would simply key on the leader and trade the laggard. obviously life as a trader ain't that simple, or it's all we'd ever do.
I find it simpler to simply watch the symbol I'm trading and trade price action as it unfolds. the trouble with watching "lead indicators" is they don't always lead every swing. which plants doubt in mind, which breeds hesitancy (fear), which breaks down discipline...
A couple pointers. On a daily chart, you might think CL is leading ES because it's breaking down more than the latter. But I beg to differ. ES simply refuses to drop because its partly dependent on the underlying cash index, which itself is made of up the largest 500 companies--of which, the financial sector garners the largest sway. As such, ES cannot buckle under unless the financials gives way and you know that's not likely considering that Uncle Sam is looking after them (or so I'm told).
Now to the gist of my argument. CL definitely trails behind ES on an intraday basis. As a daytrader, this matter to me more than what happens on the daily chart. You can see this time and time again. Whenever there's a short-covering rally, ES would always start the march first. That is why it's crucial to monitor ES along with CL IMO.
impressive
why did you call 83.75
why did you call 83.75