I think the best way to trade them is by waiting for the first signal to generate. So if RB generates a clear sell signal and crude doesn't, you sell the gasoline crack. You could use weekly, monthly, QTR, not sure about intra-day yet. I would trade in the direction of the seasonality trend so I would be looking to sell the gasoline cracks and buy the heating oil cracks. The problem is the heating oil cracks already had a massive blowout to the upside. Gasoline cracks are still trading in the mid 20's and could easily trade back into the low to middle single digits.
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The ACD Method
- Thread starter sbrowne126
- Start date
I think the best way to trade them is by waiting for the first signal to generate. So if RB generates a clear sell signal and crude doesn't, you sell the gasoline crack. You could use weekly, monthly, QTR, not sure about intra-day yet. I would trade in the direction of the seasonality trend so I would be looking to sell the gasoline cracks and buy the heating oil cracks. The problem is the heating oil cracks already had a massive blowout to the upside. Gasoline cracks are still trading in the mid 20's and could easily trade back into the low to middle single digits.
AAPL's monthly A down is 582. Looking for Monday to see if we confirm. Already confirmed a QTR A down at 622. This is not that rare though. We spent the entire 2nd QTR below the QTR A down in AAPL believe it or not before taking off in the 3rd QTR. So don't get too excited here.
Natty Gas tested the monthly A down today at 3.52 but the number lines have been getting crushed since the failed QTR A up at 3.80. The 5 day was at -4 on that failed QTR. Currently the 5 day is -7 so this is NOT a level I would want to buy just yet.
My monthly in Crude Oil is 83.58 which is about a 1 pt higher then the QTR level. My 5 day in crude is +3 though. That leads me to believe that the recent weakness might be Sandy related (demand destruction).
Gold was telegraphing it's breakdown through the number line implosion. I've discussed this now several times. The idea of using the 5 day to filter whether or not you take a monthly trade whether it be a momentum move or a fade entry. Gold was sitting at the QTR A down for a week while the 5 day number line was getting crushed. That did not bode well for Gold. The 5 day in Gold has been negative the entire month of October. The 30 day is -16.
Natty Gas tested the monthly A down today at 3.52 but the number lines have been getting crushed since the failed QTR A up at 3.80. The 5 day was at -4 on that failed QTR. Currently the 5 day is -7 so this is NOT a level I would want to buy just yet.
My monthly in Crude Oil is 83.58 which is about a 1 pt higher then the QTR level. My 5 day in crude is +3 though. That leads me to believe that the recent weakness might be Sandy related (demand destruction).
Gold was telegraphing it's breakdown through the number line implosion. I've discussed this now several times. The idea of using the 5 day to filter whether or not you take a monthly trade whether it be a momentum move or a fade entry. Gold was sitting at the QTR A down for a week while the 5 day number line was getting crushed. That did not bode well for Gold. The 5 day in Gold has been negative the entire month of October. The 30 day is -16.
Quote from Maverick74:
AAPL's monthly A down is 582. Looking for Monday to see if we confirm. Already confirmed a QTR A down at 622. This is not that rare though. We spent the entire 2nd QTR below the QTR A down in AAPL believe it or not before taking off in the 3rd QTR. So don't get too excited here.
Natty Gas tested the monthly A down today at 3.52 but the number lines have been getting crushed since the failed QTR A up at 3.80. The 5 day was at -4 on that failed QTR. Currently the 5 day is -7 so this is NOT a level I would want to buy just yet.
My monthly in Crude Oil is 83.58 which is about a 1 pt higher then the QTR level. My 5 day in crude is +3 though. That leads me to believe that the recent weakness might be Sandy related (demand destruction).
Gold was telegraphing it's breakdown through the number line implosion. I've discussed this now several times. The idea of using the 5 day to filter whether or not you take a monthly trade whether it be a momentum move or a fade entry. Gold was sitting at the QTR A down for a week while the 5 day number line was getting crushed. That did not bode well for Gold. The 5 day in Gold has been negative the entire month of October. The 30 day is -16.
more important than all of that with respect to gold was cramer was very bullish at 1785.00 with carl on CNBC.. charts graphs, fast talk.... all made sense!
Quote from Maverick74:
Natty Gas tested the monthly A down today at 3.52 but the number lines have been getting crushed since the failed QTR A up at 3.80. The 5 day was at -4 on that failed QTR. Currently the 5 day is -7 so this is NOT a level I would want to buy just yet.
My monthly in Crude Oil is 83.58 which is about a 1 pt higher then the QTR level. My 5 day in crude is +3 though. That leads me to believe that the recent weakness might be Sandy related (demand destruction).
With products like Nat Gas and Crude Oil which have monthly rolls at (usually ) large contangos, what kind of adjustments do you need to make to come up with a Quarterly A level?
Thanks
Quote from OneFive:
Quote from Maverick74:
Natty Gas tested the monthly A down today at 3.52 but the number lines have been getting crushed since the failed QTR A up at 3.80. The 5 day was at -4 on that failed QTR. Currently the 5 day is -7 so this is NOT a level I would want to buy just yet.
My monthly in Crude Oil is 83.58 which is about a 1 pt higher then the QTR level. My 5 day in crude is +3 though. That leads me to believe that the recent weakness might be Sandy related (demand destruction).
With products like Nat Gas and Crude Oil which have monthly rolls at (usually ) large contangos, what kind of adjustments do you need to make to come up with a Quarterly A level?
Thanks
I use whatever contract is active. So let's say the Oct contract in CL has the QTR A down at 83.00 and the current price is 84.00. Now we roll to the Nov contract. That contract has the QTR A down at 83.50 but the current price at 84.50. So in both cases, CL was sitting 1.00 above the QTR level. So the process is pretty seamless.
Crude oil has done a lot of work lately improving it's 30 day number line. From a low of -28 it's now down to -7. It's 5 day is now +4. So keep an eye on this baby. She looks like she might want to start lifting. The weekly A up is 86.41
The cracks continue their vertical climb. Heating oil crack is up 2% today and the gasoline cracks are up almost 7% today. The gas curve is still in steep backwardation. Brent/WTI spread back over $23.
The cracks continue their vertical climb. Heating oil crack is up 2% today and the gasoline cracks are up almost 7% today. The gas curve is still in steep backwardation. Brent/WTI spread back over $23.
Quote from Maverick74:
Crude oil has done a lot of work lately improving it's 30 day number line. From a low of -28 it's now down to -7. It's 5 day is now +4. So keep an eye on this baby. She looks like she might want to start lifting. The weekly A up is 86.41
The cracks continue their vertical climb. Heating oil crack is up 2% today and the gasoline cracks are up almost 7% today. The gas curve is still in steep backwardation. Brent/WTI spread back over $23.
seems like the indices are close to the weekly A up as well...
Quote from Maverick74:
Crude oil has done a lot of work lately improving it's 30 day number line. From a low of -28 it's now down to -7. It's 5 day is now +4. So keep an eye on this baby. She looks like she might want to start lifting. The weekly A up is 86.41
The cracks continue their vertical climb. Heating oil crack is up 2% today and the gasoline cracks are up almost 7% today. The gas curve is still in steep backwardation. Brent/WTI spread back over $23.
The number lines don't lie. Confirmed weekly A up in Crude now. Number lines getting stronger.