WTI @ 69.33 headed for $70s - $80s end of August

[Top Oil Trader + 469]

When I look at the charts,  I filter out the noise, (greed, fear and uncertainty), this is hard to do, but someone has to do it.

Here are my ideas about the oil prices.

Prices as of this writing where 69.33, they will head to 68.xx later today.

Here is a secret that maybe lots of people who follow fundamentals including investors don't know or are not aware off in too much detail, and this also explains why so many investors, institutions and hedge funds get it wrong most of the time.

First of all many people ask me if i can help them trade oil.

Disclaimer: Futures is very risky, you could lose more than your investment.

The prices in most cases don't go up or down because of fundamentals, this of course doesn't make any sense to people who use logic to make their decisions, and this sounds like a conspiracy. But oil prices go up or down, and then a reason is placed on the the price move after the fact, and it could be any of many reasons. This is not to say that a fundamental reason should not be searched out whenever there is a price move. Now why do the oil futures fluctuate almost daily by $2 and sometimes $6 in a week. Fortunes are made and lost on such moves. Here are some of the reasons.

1] There are automatic sell and buy trades that can come in the oil market, at any time, simply from a program, here is one article from Fox, and of course there are books written about and degrees you can take to know how to do this.

2] Here is another article why floor traders disappeared

3] any many more.

So whenever there is some crazy move in the oil prices that no one can figure out, in most cases it is from some computer algorithm, that sometimes could even  create the appearance of a bear market or a bull market. This is why for most, to figure out the trend in anything today is next to impossible, since at anytime an order could come in, that would wipe out  most positions of current investors.

So having said that, to determine where prices can go with all this noise in the market, you need to understand those algos (programs) and when they might trigger for how long, again almost impossible unless you have a good understanding of those programs, and many companies don't use the same algos for the same time frames.

Therefore the targets I give here on top, are taking into the account the present and future fluctuations in the WTI prices, see no matter what these programs do, the prices moves they cause, are just illusions a temporary mirage, and cause a temporary move in prices, but nevertheless cause a permanent loss for the investors. What these programs do is two things they make the programmers very rich one of those people, is one of the richest in this world. But at the same time they provide liquidity for producers and companies who want to hedge. But this goes on daily. And is a source of lots of confusion for analysts, chartists,  investors and the news, who all constantly need to come up with a reason for the current move.

For people who are into Elliot Waves or Gann or other techniques, understand for every chart there are ten opinions out there, for each time frame.

 

[Dan Warnick + 6,100]

1 hour ago, Top Oil Trader said:

When I look at the charts,  I filter out the noise, (greed, fear and uncertainty), this is hard to do, but someone has to do it.

Here are my ideas about the oil prices.

Prices as of this writing where 69.33, they will head to 68.xx later today.

Here is a secret that maybe lots of people who follow fundamentals including investors don't know or are not aware off in too much detail, and this also explains why so many investors, institutions and hedge funds get it wrong most of the time.

First of all many people ask me if i can help them trade oil.

Disclaimer: Futures is very risky, you could lose more than your investment.

The prices in most cases don't go up or down because of fundamentals, this of course doesn't make any sense to people who use logic to make their decisions, and this sounds like a conspiracy. But oil prices go up or down, and then a reason is placed on the the price move after the fact, and it could be any of many reasons. This is not to say that a fundamental reason should not be searched out whenever there is a price move. Now why do the oil futures fluctuate almost daily by $2 and sometimes $6 in a week. Fortunes are made and lost on such moves. Here are some of the reasons.

1] There are automatic sell and buy trades that can come in the oil market, at any time, simply from a program, here is one article from Fox, and of course there are books written about and degrees you can take to know how to do this.

2] Here is another article why floor traders disappeared

3] any many more.

So whenever there is some crazy move in the oil prices that no one can figure out, in most cases it is from some computer algorithm, that sometimes could even  create the appearance of a bear market or a bull market. This is why for most, to figure out the trend in anything today is next to impossible, since at anytime an order could come in, that would wipe out  most positions of current investors.

So having said that, to determine where prices can go with all this noise in the market, you need to understand those algos (programs) and when they might trigger for how long, again almost impossible unless you have a good understanding of those programs, and many companies don't use the same algos for the same time frames.

Therefore the targets I give here on top, are taking into the account the present and future fluctuations in the WTI prices, see no matter what these programs do, the prices moves they cause, are just illusions a temporary mirage, and cause a temporary move in prices, but nevertheless cause a permanent loss for the investors. What these programs do is two things they make the programmers very rich one of those people, is one of the richest in this world. But at the same time they provide liquidity for producers and companies who want to hedge. But this goes on daily. And is a source of lots of confusion for analysts, chartists,  investors and the news, who all constantly need to come up with a reason for the current move.

For people who are into Elliot Waves or Gann or other techniques, understand for every chart there are ten opinions out there, for each time frame.

 

The headlines, at any given time, seem to have little or no relation to what has already, already, happened in the market, oil or otherwise.  I always get the feeling that "Joe" says "hey Bob", how about this headline.  "Bob" grunts and online it goes.  Ha'ha!  

[Dan Warnick + 6,100]

Current headline on one of the big news services: Oil Steady Amid Trade War Concerns, Signs of Tight Inventory

Everybody, place your trades!

[Top Oil Trader + 469]

You hit the nail on the head. But also what I find interesting, that one day the analysts will say, ok we are in a bear market, oil can't go up no more, and then the next day, they completely forgot what they said yesterday, and now they are bulls again. They are simply swayed by the big moves in the oil prices. And need to constantly go on the winning side, to look intelligent. Its very sad, but also very hilarious. The big money in oil is made by the investors who pick the trends, (indeed many have tried and more have failed), but that is where the big money is made. Just ask Buffet, he has a couple of stories.

[Dan Warnick + 6,100]

1 minute ago, Top Oil Trader said:

You hit the nail on the head. But also what I find interesting, that one day the analysts will say, ok we are in a bear market, oil can't go up no more, and then the next day, they completely forgot what they said yesterday, and now they are bulls again. They are simply swayed by the big moves in the oil prices. And need to constantly go on the winning side, to look intelligent. Its very sad, but also very hilarious. The big money in oil is made by the investors who pick the trends, (indeed many have tried and more have failed), but that is where the big money is made. Just ask Buffet, he has a couple of stories.

I fear you use the term "analyst" far too easily.  Perhaps "readers" or "narrators" would be better titles?  The fact is, what they said yesterday was based on nothing and they don't even remember what they said yesterday, simply because what they said was irrelevant and their apparent change of position today is also irrelevant.  When a program does get an actual analyst on the show you can bet that they are telling the story as it relates to promoting what product they are trying to sell to the masses.

[Top Oil Trader + 469]

Indeed

[Top Oil Trader + 469]

I watch analysts everyday, both for stocks, oil, and currencies, and I am always amazed how much confidence they have in their new forecast, considering the prior ones being so wrong. It seems like to be an analysts you need to have no feelings and no emotions, since how can you face the public again and again, knowing how many times you have been proven wrong, unless your purpose is just to sell your companies services.

[Top Oil Trader + 469]

But I must admit, that sometimes, I need to skip some analysts, since I get so tired of their in competence. So if I do watch them, i'll usually need to psyche myself up, and try to endure the pain. Now there are some good analysts those are more number people,  but those people work for hedgefunds, or own one just like Simmons.

[Dan Warnick + 6,100]

1 minute ago, Top Oil Trader said:

I watch analysts everyday, both for stocks, oil, and currencies, and I am always amazed how much confidence they have in their new forecast, considering the prior ones being so wrong. It seems like to be an analysts you need to have no feelings and no emotions, since how can you face the public again and again, knowing how many times you have been proven wrong, unless your purpose is just to sell your companies services.

No feelings and no emotions?  How about no soul?  No shame.  On the other hand, I get it that their job is to pitch what the boss wants pitched with the certainty that they will lose their job if they don't do that.  I certainly don't believe that they spend their off hours researching anything for tomorrow's program.  To what end, other than their own?

[Dan Warnick + 6,100]

3 minutes ago, Top Oil Trader said:

But I must admit, that sometimes, I need to skip some analysts, since I get so tired of their in competence. So if I do watch them, i'll usually need to psyche myself up, and try to endure the pain. Now there are some good analysts those are more number people,  but those people work for hedgefunds, or own one just like Simmons.

A quote from the page you linked: "God gave me a tail to keep off the flies. But I'd rather have had no tail and no flies."

Love it!

[Top Oil Trader + 469]

Yes, I agree I didn't want to go too far. You will notice that before the next big reset in the stock market, just before, is when all the analysts, and talking heads will be predicting new highs. On the other hands lots of bear forecasters, have not been wrong for 6 years in a row, year after year. And those guys are still on the news, so it comes from both sides. Since 2010, 2012, etc people have been predicting the crash, and those guys have big followings, and investors, all hoping that one day, they will be right, so they at least can recuperate some of their losses.

[Top Oil Trader + 469]

Well good point, And I should know about flies, I built my own fly traps probably have 15 outside. But yes, when you surround yourself with the news, and the so called experts, your are bound to eventually give their hype a try. Since most investors have the news on all day, go to any trading desk, they got news screen all over the place.

[jonathan yoakum + 13]

I like to think of trading oil the same as approaching the ocean. If you don't respect the ocean it will devour you. Sometimes there are riptides, so if you swim into that situation like there are none you could get taken for a long swim or even worse lose your life.

But the last thing I would do is ask everyone on the beach their opinion of its safety. Many dont have a clue but everyone has an opinion. Very few are worth listening to and at some point you don't need advice. Just a few indications and jump in or wait.

 

Know when you dont need anymore advice and just do your analysis. But always respect the markets or they will devour your account.

[Top Oil Trader + 469]

Johnathan,

you describe the exact reason why people can never figure out the market.

1] People think they are smarter than the market, so if you follow your indications, you will be history, before you can say story.

2] Today trading is a lot more difficult, since just when you think it will break out it collapses, and other way around. This is because of very fast programs that trade very large position sizes, wiping out most in a couple of minutes.

But if you can anticipate such moves, and either stay away during the storm, or simply hang up  a flag and go with the storm, that is when you don't follow you intuition or brain, but begin to listen. I mean simply watch the performance of the hedgefunds, who employ only the smartest traders they can find, and notice how many don;t beat the S&P,  even the few that do make money many don't even beat the S&P, and how many hedgefunds end up closing down, after losing 100s. Here is an article about stocks and hedgefunds.. Article on oil hedgefunds. I do watch lots of traders, not oil,  with lots of experience, and some think they are the smartest, and can always figure it out,  and it is amazing, what dumb losing positions they enter, and don't exit until they have to close their accounts.

The reason you can much fortunes in trading is simply, you have no competition, assuming you eventually figure it out.

[Dan Warnick + 6,100]

2 hours ago, Top Oil Trader said:

Johnathan,

you describe the exact reason why people can never figure out the market.

1] People think they are smarter than the market, so if you follow your indications, you will be history, before you can say story.

2] Today trading is a lot more difficult, since just when you think it will break out it collapses, and other way around. This is because of very fast programs that trade very large position sizes, wiping out most in a couple of minutes.

But if you can anticipate such moves, and either stay away during the storm, or simply hang up  a flag and go with the storm, that is when you don't follow you intuition or brain, but begin to listen. I mean simply watch the performance of the hedgefunds, who employ only the smartest traders they can find, and notice how many don;t beat the S&P,  even the few that do make money many don't even beat the S&P, and how many hedgefunds end up closing down, after losing 100s. Here is an article about stocks and hedgefunds.. Article on oil hedgefunds. I do watch lots of traders, not oil,  with lots of experience, and some think they are the smartest, and can always figure it out,  and it is amazing, what dumb losing positions they enter, and don't exit until they have to close their accounts.

The reason you can much fortunes in trading is simply, you have no competition, assuming you eventually figure it out.

I used to trade markets back 15-20 years ago and have only gotten back into it seriously this year, and, to JJ's point, today it is very very different.  It is wildly apparent that those folks and their algos have become extremely adept at collecting money from traders.  I read a day or two ago that similar algos are in place in Las Vegas, making it even harder than it ever was to win, and people are staying away from Vegas because of it.

JJ, that leads me to a question I have been wanting to get your opinion on.  I know you are not "the" expert, but you do have more understanding of the algos of the day than anyone else on here, so it would be interesting to get your read on it:

Since these algos are so good at harvesting trader's money, I would assume, like Vegas, that eventually a lot of traders of all sizes will simply "stop going to Vegas".  Not all, of course, but a good percentage of them anyway.  Once that cycle has come along and the algo guys know it, won't they be able to harvest the last of the crop by turning off the algos, or turning on new, previously unknown algos?  I mean, if people like yourself were suddenly reading charts that no longer related to algos, it would seem to follow that a lot of algo-knowledgeable chart readers could get bitten before they figured out what was happening?  And then, just when everyone was adjusting to the new arena, they could simply switch the old algos back on, or have even another different level of algos waiting in the wings.

Sorry for the long, messy paragraph.  I hope you can understand what it is that I am trying to get my head around.

[Top Oil Trader + 469]

Ok so about forex again. Here is a beautiful example of how stiff necked some traders are. What if I told you, there is someone who trades an account 2.5 Mill. Ok, thats not bad. But he trades others money. So right now he trades the eurusd and so far last 2 month been very good, not great trades but accurate. Anyways, but this dude just took a big risk, I think the eur will still go down here at 1.156 or, so eur last week was about 1.175 and went straight down, not even a rest stop.  That a big drop for the eur, which if it moves its like a miracle. So now it went down quite a lot, not traders are used to buying low selling high, So this dude, thinking eur hit a floor, took a big position on eur longs, he went long 16 positions, and eur is still tanking, if euro drop a lot more, he will need to close his account. He has more than 3000 people following him, and if he loses on this one, he takes down 3000 people with him. Its the number one guy on zulutrade, here is the link for him. What he should have done is simply go long just 1 position, and averaged up, instead what he is doing is averaging down, a big nono if you know how to trade. Now since I think the eur could drop nother 60 points later, or from now, he won't be able to get out, and will be down at least 700 points unless he averages down more which then he can down even 1200 pips. So its exciting to sometimes see people with live positions and see if they can get the message and cut down their  losses, before the investors cut them out. From what I see eur is right at the floor, and since so many people are long the eur from friday and thursday in big losses, I think the eur will have to go down, to just teach those early bulls a lesson in humility. Charts at least are saying, if you want to be a bull here, we need more confirmation, and if we dont get the confirmation way way down we go. Having said that he could get lucky and get out with a total of a 5 point gain, which in his case is like a joke. But to take such a big risk for such a small gain, is suicide trading.

[jonathan yoakum + 13]

2 hours ago, Top Oil Trader said:

Ok so about forex again. Here is a beautiful example of how stiff necked some traders are. What if I told you, there is someone who trades an account 2.5 Mill. Ok, thats not bad. But he trades others money. So right now he trades the eurusd and so far last 2 month been very good, not great trades but accurate. Anyways, but this dude just took a big risk, I think the eur will still go down here at 1.156 or, so eur last week was about 1.175 and went straight down, not even a rest stop.  That a big drop for the eur, which if it moves its like a miracle. So now it went down quite a lot, not traders are used to buying low selling high, So this dude, thinking eur hit a floor, took a big position on eur longs, he went long 16 positions, and eur is still tanking, if euro drop a lot more, he will need to close his account. He has more than 3000 people following him, and if he loses on this one, he takes down 3000 people with him. Its the number one guy on zulutrade, here is the link for him. What he should have done is simply go long just 1 position, and averaged up, instead what he is doing is averaging down, a big nono if you know how to trade. Now since I think the eur could drop nother 60 points later, or from now, he won't be able to get out, and will be down at least 700 points unless he averages down more which then he can down even 1200 pips. So its exciting to sometimes see people with live positions and see if they can get the message and cut down their  losses, before the investors cut them out. From what I see eur is right at the floor, and since so many people are long the eur from friday and thursday in big losses, I think the eur will have to go down, to just teach those early bulls a lesson in humility. Charts at least are saying, if you want to be a bull here, we need more confirmation, and if we dont get the confirmation way way down we go. Having said that he could get lucky and get out with a total of a 5 point gain, which in his case is like a joke. But to take such a big risk for such a small gain, is suicide 

 

Sounds like he has been rewarded in the past for making bad trades. Throw in group think and money.....poof byebye money.

Pretty certain most will blame the central banks, accrue gold/silver coins and buy into crypto out of spite. And the wheel goes round.

FWIW just read how much exposure Italy and France have with coming Iran sanctions. With all the Brexit drama and strengthening USD, the Euro is not a gamble I would dare to long and I'm aggressive.

Edited August 6, 2018 by jonathan yoakum

[Top Oil Trader + 469]

Well one day I will explain why the euro is done. Also why crypto will go way down. Although eveyone thinks they tulip bulbs will still go way up. The time is over. There is some dude who started a crypto hedgefund, thats pretty heroic, but he will go under. Well do some research on him and let you know.

[Top Oil Trader + 469]

First lets  tackle why the eur will go down at least nother 5 cents which is 500 points, thats a big ride if you can catch it.

Ok if I look at the charts its quite obvious, So I won't go into too much detail, besides it is not something that people care about, but in essense 1.24 was end of wave 4, from 1.24 and down to i dont want to say how far, so longs wont go into shock. But we are now in wave 4 - 5 in the euro. 

Now Cryptos, i know people are gongho about this new fad, but for now, expect lots of blood to be spilt. Looking at the crypto hedgefund, Oh i see they now say he didn't start his crypto fund, i guess he chickened out, good for him, he would have lost his shirt.

Ok to go into fundamentally why eur is going down, i usually dont spend to much times on nonsense, but there are lots of reasons, simply pick an analyst out there.

[Top Oil Trader + 469]

Here is the guy who almost opened up a crypto hedgefund, but backed out. If I was him, I would have opened it up, but simply shorted it. But the said he didnt open it since, he thought cryptos would go down, though initially he thought it would go up. So ok, then just short it, what is the problem.

 

Edited August 6, 2018 by Top Oil Trader

[Top Oil Trader + 469]

Anyways remember our friend who went long like 14 positions or the eur, well right now he is down 114 pips, and from what I said before it will get a lot worse. But what a shame to willy nilly take a risk with like 3500 traders money and 2.5 mill. What a shame to blow it up like in a day. Look at the guys chart https://www.zulutrade.com/trader/369854/trading?t=30. And this trader is actually good, if we compare him, to say other traders, but bottom line, he got lucky a couple of times, and now it just ran out. He could still stay in if he just takes a loss, but watching this guy for a while, he wont get out until the acct is really in the red.

[Top Oil Trader + 469]

Unfortunately, well i guess fortunately no us person can invest in these guys, since they are regulated by some European body. I guess for US that is considered second class, just like the euro.

[Top Oil Trader + 469]

At one point some dude here was able to trade 30 mill in capital, blew it up in a month. What a shame, all he had to do  was give me a call, I could have saved all those accounts. 

[Dan Warnick + 6,100]

3 minutes ago, Top Oil Trader said:

At one point some dude here was able to trade 30 mill in capital, blew it up in a month. What a shame, all he had to do  was give me a call, I could have saved all those accounts. 

I don't have 30 mil, but what's your number?  I'll give you a call.  

[Top Oil Trader + 469]

This is something you need to ask Charles Swab about since I am not licensed. But I think they have a way.

There are 3 major pairs, the EURUSD, GBPUSD, and USDJPY.

Then we have some vegas currencies like the GBPJPY, EURJPY, and some annoying ones like EURGBP and others.

Now the EURUSD is so easy to trade, I am always surprised how people blow up their accounts just trading the euro.The eur is like you might say a coloring book you give to kids who still can't talk. But still people are just so blind, they can't see whats comming. So like at 1.24 was the short, that right now would have been a $9000 trade on 1 contract with no margin. And if someone did just 3:1 margin which is like a joke that would have been an easy $27k. But its gets better since though many think the eur will reverse once it hits 1.15, actually when euro hit 1.17 last week many longs thought 1.1850 was next and they are still hoping this to be the case, Yes it may do a dead cat bounce once it hits 1.1490, but gravity will take over. From my research about 99% of retail traders are long euro, and hoping for the best. But here maybe is a small synapsis of why maybe I could be right that the euro is going down, and for now at least doesn't stand a chance. https://www.investing.com/technical/technical-summary Most traders know this, but somehow their left brain, got confused with their right brain, and their connectors or spark plugs, didn't fire on all cylinders. Now if I look at our friend from england right now he is down, 185 pips. I mean had he shorted he could have been up $1,850 bucks. And remember we are  talking about 3500 accounts soon to be wiped out. It's sad, but a great way to watch clueless traders, do themselves in.

You see the day traders do it all wrong, even when they make money they make liek $60 bucks, $20 and such. Then when they lose they lose $2k. Instead they need to go for the kill, go for the $3k trade and with margin 9k trade, and sit back relax go to vegas, and wait for the next opp. But no, hardly any trader even does that, unless they are a hedgefund, but then they get it wrong, and end of closing the fund, like the 784 funds that closed in 2017, i expect that number in 2018, or 2019 to at least double. I thin kmy posts are way too long, maybe one day i can write a book based on my posts.

 

Edited August 6, 2018 by Top Oil Trader