In the book Energy Shift by Eric Spiegel he makes the point that 50%(?) of world oil use is used in stationary applications ie generators, heating etc. So this is an area of usage that you can find viable alternatives, especially with a climbing oil price. Therefore most of this oil could in the future could be used primarily for transportation.
CL Redux
- Thread starter schizo
- Start date
In the book Energy Shift by Eric Spiegel he makes the point that 50%(?) of world oil use is used in stationary applications ie generators, heating etc. So this is an area of usage that you can find viable alternatives, especially with a climbing oil price. Therefore most of this oil could in the future could be used primarily for transportation.
Quote from BCE:
Analyzing my own one CL trade today. I entered at 89.60 on the pullback which became more of a selloff. And it was obviously a counter-trend trade. Not sure what made me pull the trigger on that as it's generally not my style these days. At least not until it's based more. Must have had a flash back.It wasn't IV's entry at that level as I didn't even see his until I had posted my own entry. I drew some horizontal lines last night. And one was the Tuesday high of 89.57. And I think somehow seeing that I saw it as some support. Resistance becomes support. Shakes his head. In retrospect, a pretty sketchy support level.
89.60 was the pullback of a third leg up off lows in the 60-min/1week chart, and was the next R (from Tuesday) that needed to hold as support when 90.40 previous R failed to attract buyers. Also 89.47-89.66 was the narrow range congestion leading into the NYMEX opening breakout.
From that perspective, it was a potential support area, but a low probability long trade for 5-min chart day traders.
Look at the 5-min chart: The uptrend line from NYMEX opening low across the 10:30am ET bar low broke down during the 11:50am bar, the 20-bar EMA broke down at noon bar, and 90.40 previous R broke down as support (a key pivot point as well) during 12:25 bar and then 90.40 became new R. This new R formed the second LH beneath a falling 20 EMA, a fully confirmed trend reversal on the 5-min chart.
Day traders are looking for short entries only at this point. Short any pullback to a LH or any breakout of a previous pivot low.
89.70 is the 50% retrace level from the RTH high to the overnight low. (I keep a list of these key levels in front of me throughout the day). If price breaks that level and the bar closes below that level, the overnight low then comes into play. By that I mean it's more likely price will make an attempt to visit that low than it is to reverse any time soon back toward the HOD.
Because price was unable to close above that level after it broke, there was no confirmation to go long @ 89.60.
Since we make a living trading in the direction of higher probabilities, 5-min day traders are selling short here until price offers us a reversal signal. The earliest reversal signal appeared at the close of the 1:50pm ET bar, when price left behind a series of HL's.
Those who went long @ 89.30, break of the ascending triangle took a clean confirmed entry. I didn't want a survivable stop to be so far away, so I cheated off the 1-min chart to enter @ 89.20, but even then I placed a 21-tick stop just below the round number. In retrospect, it made no sense whatsoever for me to cheat and enter the trade there; playing a triangle breakout, you can use a really tight stop (I use a 10-15 tick stop on breakouts). It was one of those "duh" moments. The small extra fee you pay for a confirmed price action entry is covered in the long run by far more winning trades.
So price didn't quite make it to the overnight low, instead finding support just a few ticks above Wednesday's high, but it was pretty close.
BCE, I usually place my protective stop just as it looks like my entry order is about to be lifted, just to be safe. I find CL to be too volatile for mental stops.
Mexicoâs single giant finally slipped below 500 thousand barrels per day of production in May, to 499,286 kbpd. Itâs still pretty astonishing to reflect that just two years ago, Cantarell was still producing a million barrels per day.
http://seekingalpha.com/article/212254-mexico-s-astonishing-oil-production-decline
http://seekingalpha.com/article/212254-mexico-s-astonishing-oil-production-decline
Thanks very for the more detailed breakdown. That was my main thought too, that although 89.60 was a support level, it was a very low probability support level and basically a bad long reversal entry.
I look at retraces that are fibonacci like, but actually my read is just an intuitive level based on years of experience looking at stock movement and charts. I know this is not TA based directly and strictly, but in some ways it is in a looser sense. Sometimes I feel like maybe I was Fibonacci in a previous life.
I'd be interested in your thoughts on this IV. As you frequently do counter trend trades, what analysis do you use to determine retrace levels that may result in a reversal? I sense you look at the ranges for the day and if CL has moved "too far" (2 to 3 points) in one direction we can look for a reversal. And I guess my take on that is that although most of the time this would work very well, there are times when it wouldn't and the move continues and averaging in wouldn't work well. You all know my take on that as I've mentioned this frequently. (Redundantly?
) And it seems IV that you also make judgments based on the most "significant" news which I myself have a hard time determining which factor is the most "significant". Is that right? And I also agree with your call on the early entry ND. Better to wait for more confirmation.
As far as placing the stop goes, I agree totally. This is true especially for the reasons stated. CL can move too quickly for mental stops. This was evidenced when I lost my data feed for just one minute (see the chart) and it fell more than a half a point in that time. Also notice the huge spike in volume on that one minute candle. http://www.elitetrader.com/vb/attachment.php?s=&postid=3096678
It's funny you mention "-- SHE WANTS TO TRADE -".
In my post above I had originally included a "joke" about someone asking in a few years, "Whatever happened to NoDoji?" And the response was, "She wrote a few best selling books on trading, but doesn't trade any more. Plus she runs a trading room, but only offers instruction." This was of course a joke in reference to Al Brooks who I hear doesn't actually call trades in his trading room. Thanks for the update on Al who knows a lot and definitely put his time in.
You are correct about Al's daily webinar. His purpose is not to call trades but rather to provide a context for those wishing to learn PA. I find it very valuable educational tool at a rock bottom price -- $100 a month.
Tommy
Tommy
Quote from BCE:
It's funny you mention "-- SHE WANTS TO TRADE -".
Thanks for the update on Al who knows a lot and definitely put his time in.
Wow, that's definitely a bargain to be able to follow a maestro as he analyzes the market in real-time. Price action that leads into a strong setup can look indecisive, and sometimes downright ugly at the hard right edge of the chart, so having an experienced trader help you focus on things in advance so you're prepared to trade without hesitating, helps cement what the chart looks like in real-time when it matters, not after-the-fact when it's easy to come up with reasons why price did X instead of Y.
Thanks Kid. Here's the link to the others. http://www.youtube.com/user/BrooksPriceAction
I found some Mark Douglas ones too that are great. You need to download software to play them. I'll post the links shortly.
Hope everyone is having a nice weekend. It's beautiful here in Santa Barbara after a really cold night (for us at least) of rain. Mountains are covered with snow and look like this.
Here's the link to the others. http://www.youtube.com/user/BrooksPriceActionI found some Mark Douglas ones too that are great. You need to download software to play them. I'll post the links shortly.
Hope everyone is having a nice weekend. It's beautiful here in Santa Barbara after a really cold night (for us at least) of rain. Mountains are covered with snow and look like this.