CL Redux

*NYMEX-Crude ends up 4 pct on Egypt unrest, U.S. GDP

http://www.reuters.com/article/2011/01/28/markets-energy-nymex-idUSN2821791220110128

At the close, light, sweet crude volume on the NYMEX
topped 1.38 million lots, nearing the record 1.432 million lots
reached on April 13, 2010, Reuters data showed.

* Money managers cut their net long positions in U.S. crude
oil by 19 percent, to 155,487, in the week to Jan. 25, the
Commodity Futures Trading Commission said. [ID:nN28184438]

* The Suez Canal has been operating normally over the past
three days amid growing unrest in Egypt, and the transit
schedule for Saturday shows no delays, a shipping source said.
[ID:nN28149108]

* For more on Egypt and related matters, see FACTBOX
[ID:nLDE70R18U], [ID:NLDE70Q1VB] and [ID:nN28166007]
* The U.S. economy gathered speed in the fourth quarter, if

MARKETS NEWS
* The dollar rallied as tensions in Egypt raised concerns
about stability in the Middle East and Africa, compelling
investors to seek safer havens such as the greenback and trim
their holdings of riskier assets. The rise in U.S.
fourth-quarter growth also lifted the dollar. [USD/]
* U.S. equities suffered their biggest one-day loss in
nearly six months as anti-government rioting in Egypt prompted
investors to flee to less-risky assets. [.N]
* Copper closed 1.5 percent away from its record high, as
the fourth-quarter expansion of the U.S. economy reaffirmed
robust industry demand prospects for the metal.
[ID:nLDE70R0YS]
* Gold surged 2 percent as fears that unrest in Egypt would
spread across the Middle East prompted safe-haven buying.
[GOL/]
SETTLE NET PCT LOW HIGH CURRENT DAY AGO
 
Quote from schizo:

I just saw a headline on Yahoo! Finance stating that today's selloff is attributable to Egyption unrest: "Stocks Retreat as Egypt Unrest Shakes Wall Street". Oh really?!

I, on the other hand, think today's selloff in the stock market is politically driven to counter the $2.5 trillion spending cut bill introduced by the House Republican. This was the case with just about all of the previous corrections.

At any rate, do you seriously believe political unrest in Egypt will have much impact on oil supply? If that were the case, then why isn't the market concerned about the possible Israeli/U.S. attack on Iranian nuclear facility? That should really disrupt the flow of oil. After all, Iran is the second largest OPEC producer.

But more realistically, do you believe Uncle Sam will sit idly while Egypt goes down the drain and possibly igniting a fire that will engulf the entire Middle East? I think not. I know how highly the American government values democratic ideals like freedom of speech and whatnot (well who doesn't, especially when it serves one's own interest), but I will bet it will throw the good ol' democracy with the bathwater for capitalism--or money, to put it more bluntly.
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I'm not a Middle East politics expert so can't say what effect the unrest in Egypt will have on oil supplies. And IV has posted some info on the Suez Canal operations here. I personally think that today's general market selloff was obviously related to what's happening in Egypt and not driven by domestic politics. And dramatic images of buildings burning and people taking to the streets and fighting troops in a significant country like Egypt was bound to spook the market. Also Ford and Amazon had sketchy earnings reports which contributed.

But mainly I think the general market was overbought, which I mentioned a couple of days ago. It was stalling out. And it was looking for a reason for managers to take profits on the huge recent runup. Now whether the unrest in Egypt was a good enough reason really may not matter that much. We'll see how things play out over the weekend.

As far as " why isn't the market concerned about the possible Israeli/U.S. attack on Iranian nuclear facilities?" I used to think this would be a big issue. But from what I've heard lately (correct me if I'm mistaken) Iran's nuclear facilities are buried so deeply underground as to make them impenetrable by any US or Israel air raid. If that's true then that takes this off the table. Now if they do develop nuclear weapons, which they may be, then that's another issue.

And one would think that part of the jump in CL was short covering. We may see a pullback to the 87-87.50 levels by Monday. We'll just see what happens. Obviously other fundamental factors, which IV has also posted lately, were driving it down. From a technical perspective it really seemed to run into major resistance just over 92. And having a hunch or feeling or conviction it was going higher from there was just that, a hunch and opinion. Price action of course is for us traders all that really matters.

Lets see what we can see starting Sunday and see if we can help one another make some money.
 
Quote from BCE:

I liked the idea of trading QM instead maybe that Picaso mentioned. A little safer. Of course the reward is reduced too when you're right.

And as you say if it's too volatile I just let it go. I generally don't trade when there's an economic report coming out. Not too long ago I lost $2856 in a little over a minute trading 6 TF contracts (which I pretty much never do either) when the Michigan Consumer Sentiment Report came out and I forgot it was coming out. It's at a weird time, 6:55 PST. Prices just dropped in a blur in the Super DOM. A lot faster than I've seen CL move. The risks of the market.
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One more thing in this lesson of "don't do what I did" is I had somehow failed to place a stop during this trade. Shame on me and look how much it cost me. I was tired that morning and just kind of waking up and shouldn't have even been trading. Just sloppy trading.
 
InvestVision,

Thanks for all the info you gather and share. Much appreciated. Good to know what's up fundamentally too as well as from a technical perspective. Nice that we can all work together and contribute in our own individual ways towards making this thread what it is and helping one another be more successful.

And along those lines, have I mentioned the Let's Help BCE fund raising charity lately? :p

Have a great weekend everyone. Probably see you on Sunday. :)

__________________
We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time
- T.S. Eliot -
 
Here's an article from the Los Angeles Times emphasizing the significance of what's going on in Egypt.

http://www.latimes.com/news/nationworld/world/la-fgw-egypt-israel-20110130,0,2398514.story

Israel Watches Egypt Uprising with Fear

6:38 AM PST, January 29, 2011

JERUSALEM

Israel watched fearfully Saturday as anti-government unrest roiled Egypt, one of its most important allies and a bridge to the wider Arab world.

The Israeli prime minister ordered government spokesmen to keep silent. Officials speaking anonymously nonethless expressed concern violence could threaten ties with Egypt and spread to the Palestinian Authority.

The Egyptian unrest dominated Israeli media. Israeli TV news channels provided hourly updates. Israel Radio reported extensively on developments and dubbed its broadcasts "Fire on the Nile."

Writing in the Haaretz daily, columnist Aluf Benn speculated that President Hosni Mubarak's "fading power" leaves Israel with few friends in the Middle East.

Palestinian President Mahmoud Abbas on Saturday called Mubarak, according to the Palestinian news agency Wafa. Abbas told the Egyptian leader that he is eager to see Egypt stable and secure, the agency said.

If Egypt's Muslim Brotherhood -- the main opposition group -- gains power in the turmoil, the balance of power between the rival Palestinian camps could change. Abbas is backed by the West, while his Islamic militant Hamas rivals draw their support from Iran, Syria and Hezbollah. Hamas is the Gaza branch of the Muslim Brotherhood.

Two Israeli officials said Prime Minister Benjamin Netanyahu ordered all government spokesmen not to comment on the mass riots in Egypt, where protesters are demanding Mubarak resign after nearly 30 years in power. Both officials were speaking on condition of anonymity.

The spokesmen have likely been silenced out of fears that any perceived Israeli involvement could further compromise an ally whose ouster would pose a serious threat to Israel.

The officials said they expect Mubarak to survive the unrest but that it could damage ties with Israel if the country's popular opposition group, the Muslim Brotherhood, makes gains.

Egypt was the first Arab country to reach peace with Israel three decades ago. Ties have never been warm, but Egypt has played a critical role as Mideast peace mediator between Israel and Palestinians.

"A stable Egypt with a peace treaty with Israel means a quiet border," one told The Associated Press. "If there is a regime change Israel will have to reassess its strategy to protect its border from one of the most modern militaries in the region."

The Israeli security officials also said they were worried that violence might spread to Gaza, the West Bank, and possibly to its other ally in the Arab world, Jordan.

Eli Shaked, a former Israeli Ambassador to Egypt, speculated in an interview with Channel 10 TV that if Mubarak's reign is destabilized, radical Egyptian Islamists could fill the void.

"It's good that Israel is keeping quiet, but there is no doubt that what is happening in Egypt is not good for Israeli interests," Shaked said. "It will only be a matter of time before a leader of the revolution arises and he will come from the Muslim Brotherhood.

Copyright © 2011, Los Angeles Times
 
Quote from Picaso:

[BVPOC still way lower, feeling sorry I took a break for milk and cookies and missed that .50-ish short.[/B]
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Nice chart, Picaso! :)

Do you find that black charts are easier on the eyes? I might have to borrow your design. Grey was an improvement from white, but I still feel that my eyes get very strained from watching them ticks :D

I`m assuming that VPOC is an abbreviation for Volume Point of Control. What kind of volume indicator is it that you`re plotting?

Thanks!

Best regards,

LF
 
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