Crude Oil on high note ..is it?

[Hook Shot]

Crazy wirld....... in one day we move from the swing lows and reclaim 50% of the slide.....

62% is near $130 (Jul Nymex) ...only $2 (200pts) away :| .............

 

[nunrgguy]

Gaa

Well, almost perfect but not quite. I was waiting for the pullback to support at $120 ish and 50ema area. It didn't quite make it but yesterday was insane. If I was trading on the hour I'd have got in but yesterdays bullish engulfing was too big for me on the dailes. Considered getting in this morning but decided the R:R was poor with the potential for stalling at $130 and the price already being close. Too far to fall...So we see a huge up gap and another big bullish day...the one that got away, maybe?
So I await the retest of $130 and a better entry.

 

[Hook Shot]

I was looing to buy $128 in the morning with $127.50 bail out ....... didn't pull trigger (cos the good buy opp had gone) and voila....

When the "good" opp goes I feel I'm winging it........ not a nice feeling.

I'm waiting for poss $135 sppt but $130 would be nicer.....

Pondering the profit taking short...from here on .......
But buying the pbk is more sensible and less time consuming

Bill McLaren saw $141-143 as potential targets when we were around $128.(aaaaagh!) ........ lets see

 

[nunrgguy]

Anyone else had a PM from 'Brend' ?

 

[grantx]

HS,

At what point will Mr Benanke fall on his sword (no, President Bush will push him) and raise rates? $150, $175, $200?

So all the caps are removed, oil drops, inflation drops, industry starts to reinvest, consumers start buying, demand rockets, OPEC cuts production and oil price resumes journey to ever higher levels.

Grant.

 

[Hook Shot]

Weird one this..

HS,

At what point will Mr Benanke fall on his sword (no, President Bush will push him) and raise rates? $150, $175, $200?

So all the caps are removed, oil drops, inflation drops, industry starts to reinvest, consumers start buying, demand rockets, OPEC cuts production and oil price resumes journey to ever higher levels.

Grant.

I dunno ......

Higher rates concurs with my view on the US long bond (train crash in slow motion) as you may recall.... But your comment (at the time ) about poss flight to quality is resonating with me at the mo... with bonds on the back foot....

150, 200, und so weiter.... who knows........... ?

I tell you what I made a mad comment/observation a few months back about reading that the lads are gonna set the economy on fire and what better way to do it than very high oil, restriction of credit ....very easy levers for "the bank" to control..... my line of thinking now is how far will they take it.... is 5.5% unemployment in US low compared to what's to come ??

But that's probably not added value comment....(?) but I am looking at EXXON (XOM) going to $100 I think the lads might like that........

6/6/08 was also the anniversary of Bobby K's killing.... 6/6.....7/7..... that number 11 again to go with the others........... The Israeli comment "seemed" stage managed.... wrt timing..

Tell you what that Climate Exchange (CLE) is doing well spotted at 300p and went to 2000p recently.......... should have bought in Jan!!

 

[Atilla]

I dunno ......

Higher rates concurs with my view on the US long bond (train crash in slow motion) as you may recall.... But your comment (at the time ) about poss flight to quality is resonating with me at the mo... with bonds on the back foot....

150, 200, und so weiter.... who knows........... ?

I tell you what I made a mad comment/observation a few months back about reading that the lads are gonna set the economy on fire and what better way to do it than very high oil, restriction of credit ....very easy levers for "the bank" to control..... my line of thinking now is how far will they take it.... is 5.5% unemployment in US low compared to what's to come ??

But that's probably not added value comment....(?) but I am looking at EXXON (XOM) going to $100 I think the lads might like that........

6/6/08 was also the anniversary of Bobby K's killing.... 6/6.....7/7..... that number 11 again to go with the others........... The Israeli comment "seemed" stage managed.... wrt timing..

Tell you what that Climate Exchange (CLE) is doing well spotted at 300p and went to 2000p recently.......... should have bought in Jan!!

Very interesting observations HS. Just pondering about it all trying to put pictures of the puzzle together... Here are my views:

1. US invasion of Iraq purely based on oil. I read articles where Whitehouse planning on occupying the country for 20-50 years. This to me is very plausible as the 9/11 and WMD reasons given have already proven to be nonsense.

Perhaps they have underestimated this cost but on a positive if oil goes sky high and they have a cheap source then high price of oil is an advantage to the US.

Will they be able to pull it off??? Remains to be seen.

2. Demand and Supply for oil is likely to be a big factor. I'm not an expert on oil but quality of oil and refinary capacity plus geopolitical supply considerations do play a significant part. Given the increase in wealth of India and China with their propensity to drive can't be ignored. Hence, I'd say whilst demand in Western world likely to decline it will be dwarfed compared to increase in demand from Asian popullace.

3. The value of the dollar as well as the dollar standard is another serious consideration. What proportion of oil rise is due to value of dollar fall is an interesting relationship. But all this can quickly change by a switch to Euro nomination for oil or a mix of two as trumpeted by some.

4. Credit crunch and oil relationship is an indirect one and so I'd guess it's more to do with economic output/growth and demand for oil.

5. Iran's oil output is impacted by Israeli war??? This is a tough one to call but I doubt it will come to that.

Considering these five scenarios unfolding...

1. Obama wins the election calls it a day and withdraws US troops and ends Iraqi occupation. Power sharing democratic parliament in Iraq is finally announced and Iraq starts producing oil and say within 5 years we are back to pre-war standards. Everyone is happy.

2. Asian economies due to rising oil and recession in West can end up with inflation and recession at home (stagflation) also. With governments unable to subsidise oil their propensity to cars and demand for oil can also come down pretty quickly.

If these oil increases passed on in cost of production further fuelling a fall in demand for goods produced in India and China thus discrepancies in costs of production in West and Asia more aligned than the differentials that exist today.

3. Euro oil nomination and dropout dollar standard whether US likes it or not will also lead to a mass adjustment of oil consumption in the US. US is one of the worst polluting and heavy users of oil in the World. This is likely to have a significant effect in stabilising oil price and further reducing demand.

4. Credit / debt crunch will work it self out of the system sooner or later. Always losers in winners one way or another. 5 years from now land scape will be considerably different in terms of leading banks.

Metal commodities my remain high for a little longer as currencies and economies stabilise.

5. Israeli / Palestinian conflict can come to an end with peace on the table. If UK and Germany can become allies against Russia, I don't see why Israel and Palestinians can't become allies against Iran. Or even better Iran sit on the peace table negotiating the peace with Israel and Palestine with rest of other interested parties in the region including syria and the rest.

What I'm saying is peace is possible in the ME providing Israel faces up to the consequence of it's actions. Like the US it can't carry on as it has been - especially more so as US influence declines.

One could say perhaps that even US influense and relationship improves in Latin America and they become friends with Venezuela again.

In summary my view is that the US's ability to control the global world economy and events with the rise of BRIC countries is very limited as hard as they try.

In the absence of any wars - based on 5 points above - direction of oil in the short to medium term $80 imo.

Will I go short maybe after the Olympics when I'm expecting China and India to feel the weight of Western recession. ???

 

[Hook Shot]

Nice slide down ....nice when momentum goes in our favour

Looking to buy now but may have missed my in just near 135 ??

 

[Hook Shot]

Do the Saudi's want to flip the switch...........

When they decide to flip the switch the other way we will probably wonder why we fell for the chindian growth story ...... Almost everyone is citing this as the reason -as this is what we have been fed - so it's probably not totally accurate ....... maybe the Fed and their cohorts are throwing their vast resources at the oil price and extorting a "dividend" from the oil producers ?

Noises coming out of the Kingdom and G8 seem to focus on a potential take down in oil...

We are at second inside day as of friday so a BIG move is afoot..... looks like down in the short term..............

 

[shortorlong]

Noises coming out of the Kingdom and G8 seem to focus on a potential take down in oil...

We are at second inside day as of friday so a BIG move is afoot..... looks like down in the short term..............

well, today oils makes another high, the lesson is ... never listen to the news. I can't believe the Saudis would mislead us in this way .. well maybe they are the ones being misled .. what happened today makes no sense .. who is screwing who?

When I grow up I want to trade oil

 

[anandsancheti]

Well no one is talking crude here anymore, why because it fallen on your face, like the 200 stuff now it looks like a dream and no more. I expected crude to face topping resistance @147.6 and bingo it was. now i expect it too take support at 105 levels and move higher to 125 from where we start another fall.
I have read all the bullish story, as goes with extremely beautiful girls, the same goes for extremely bullish markets.

 

[BREND]

I think USD still play an important part.

Oil / Gold ratio has gone too high, meaning gold has been falling but not so much on oil. But this Oil / Gold ratio chart is coming down, so this possibly means that oil is going down as well.

 

[woodstockvilla]

ohhh..I see so there is an insight meaning to Oil's progress...

thanks for letting it know....I was just about to trade on oil being higher...

u just saved me...

 

[BREND]

ohhh..I see so there is an insight meaning to Oil's progress...

thanks for letting it know....I was just about to trade on oil being higher...

u just saved me...

Now I am trying Oil / Gas inter-commodity spread trade:
Oil Trading: Oil / Gold spread trade turns profitable

 

[anandsancheti]

spreads are a good way of reducing risk but then one cannot expect big profits either, thus it is sensible that one trades stuff naked than hedged. one has to be a good analyser or needs a good system to be able to do that.
If anyone is afraid about losing money in trading then he should probably not trade.

 

[BREND]

spreads are a good way of reducing risk but then one cannot expect big profits either, thus it is sensible that one trades stuff naked than hedged. one has to be a good analyser or needs a good system to be able to do that.
If anyone is afraid about losing money in trading then he should probably not trade.

In futures trading, there are mainly 2 strategies, one is directional trading and one is relative value trading. Spread trades belong to relative value.

Update on my Oil / Gold spread trade: Oil Trading: Profit for Oil / Gold Trade Turns Higher. Profit is now US$1263.

Trading speads do not means that one is afraid of losing money, it just means that he sees opportunity in this area. Oil / Gold ratio chart shows that this chart has peaked and is coming down, so the rationale is to short oil and buy gold.

Yes I had using a system that I had created to trade forex and commodities. This system is the result from my years of trading, back-testing and experiments.

Another strategy which most traders are not familar is volatility trading. If anyone is interested to learn or find out more, feel free to send a message to me. I often trade volatility on forex on days which there are important US economic announcements, ie Non-farm payroll, GDP, leading indicator.

 

[anandsancheti]

i read your website, but think that hedging 1/8th of my risk is not sensible.
your crude trade was worth $11500, while Gold trade was $82230, the gap is so huge that i wouldnt do a trade like that. rather i would go naked.
another thing is i dont trade for these 2% moves, my thinking is that when a trader loses is shirt, thats the time to make money. because if one bad trade or drawdown can finish the trader that means it can also make another trader awesomely rich.
why will a trader lose his shirt because there was a big move against him, but my system is such that there can never be a big move against me, thus meaning that any big move which will be a drawdown for another trader, will be my profits. even is the market is limit on ,that is my profit to make and not lose. thats the way my system has been devised.

2 good trades in an year is all i need and as long as i dont have drawdowns which my system doesnt allow for, means that i will make more money than my broker from my trading.
though i know no ones system is created to suffer drawdowns but my system is unique as it stay with a stock, indices commodity or currency. either long or shot. one big move thats all i need, thus i choose to trade crude and not gold. because crude has higher beta than gold.
you can check my position in another thread on crude.

 

[BREND]

i read your website, but think that hedging 1/8th of my risk is not sensible.
your crude trade was worth $11500, while Gold trade was $82230, the gap is so huge that i wouldnt do a trade like that. rather i would go naked.
another thing is i dont trade for these 2% moves, my thinking is that when a trader loses is shirt, thats the time to make money. because if one bad trade or drawdown can finish the trader that means it can also make another trader awesomely rich.
why will a trader lose his shirt because there was a big move against him, but my system is such that there can never be a big move against me, thus meaning that any big move which will be a drawdown for another trader, will be my profits. even is the market is limit on ,that is my profit to make and not lose. thats the way my system has been devised.

2 good trades in an year is all i need and as long as i dont have drawdowns which my system doesnt allow for, means that i will make more money than my broker from my trading.
though i know no ones system is created to suffer drawdowns but my system is unique as it stay with a stock, indices commodity or currency. either long or shot. one big move thats all i need, thus i choose to trade crude and not gold. because crude has higher beta than gold.
you can check my position in another thread on crude.

You said you had read my website, then you should know that I am trading commodities and forex. Spread trade is just one of the many trades, no need to keep talking about it. Move on!

 

[BREND]

By the way I have 4 websites, not one. Click on my name and view public profile.

 

[anandsancheti]

thats not the issue, my point is that how does it make sense to have a spread that is only 1/8th your bigger position, it doesnt provide much hedge anyways. may be adjusting for beta you could have gone for 1/2 times the gold position, anyways its not my job to make anyone better. if anyone wants to get better one has to strive for it.
Plus you are a senior member here, thus you know more about trading than me.
I only have 18 months of trading experience, guess have a lot to learn.
havent got that much time to argue about useless things.