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

[Top Oil Trader + 469]

Im just looking at the charts, volatile in the extreme. On a very small timeframe looks like going up

[Top Oil Trader + 469]

Took a little more time on the lower timeframes on wti. It's now 66.8, I do expect it  to go under 66. But That is where it should start trending up. I know when I first got here about 1 month+ ago or so, I said at 75 it would hit 62.5, I had a reason for that then. But as the wti started to reverse from 66, I thought 66 was it. but I didn't realize it would retest 66, it sure looks like around 66 was the bottom 2 weeks ago, and it still looks like it.

[Top Oil Trader + 469]

Well here is the problem right now with the oil prices, and technically or fundamentally oil could go lower, but if they do, that mean my charts get broken, down bad. But why should oil go down, currencies against us tanked yesterday, it is now expensive for some countries to buy oil in $, and so that it is balanced, the price of oil would need to go down. If it doesn't go down, it means some supply problems could be forthcoming. Normally the collapse of the counter us currencies, drop oil like a rock. This is just based on the science of the petrodollar, maybe someone has time to explain the way it works better than me. But once the $ goes up the oil prices go down.

[Dan Warnick + 6,100]

Because the world is awash in oil, right now, and next week, and the week after that, etc.  The game is up, the amount of oil that is available for delivery is simply more than is needed.  The media and the large longs have used every tactic and bad math they can think of, including the "Strait of Hormuz/Iran" tactic, and it has all come to this.  There is more oil than is needed.  Currency collapses also indicate economies in trouble.  Economies in trouble have less demand.  These are the "fundamentals" the way I see them.  There are a lot of other factors, but these should be enough for discussion.  I am keen to see if these factors win out or if the technical/charts win out.  At this moment nobody can say if your way or our way knows for sure.  I think there may be some rises up, maybe even to $100+, but it will be in the $30-40s by next summer, at least in my opinion.

(Here we go!)

Edited August 10, 2018 by Dan Warnick

[Dan Warnick + 6,100]

41 minutes ago, Dan Warnick said:

Because the world is awash in oil, right now, and next week, and the week after that, etc.  The game is up, the amount of oil that is available for delivery is simply more than is needed.  The media and the large longs have used every tactic and bad math they can think of, including the "Strait of Hormuz/Iran" tactic, and it has all come to this.  There is more oil than is needed.  Currency collapses also indicate economies in trouble.  Economies in trouble have less demand.  These are the "fundamentals" the way I see them.  There are a lot of other factors, but these should be enough for discussion.  I am keen to see if these factors win out or if the technical/charts win out.  At this moment nobody can say if your way or our way knows for sure.  I think there may be some rises up, maybe even to $100+, but it will be in the $30-40s by next summer, at least in my opinion.

(Here we go!)

Having said the above, I will say that when it comes to stocks and indexes it appears without question that the charts and tools that you utilize are much more accurate than the old ways, certainly in the short term.  I am watching the Dow in particular to see if we get that 1000-2000 point drop today or next week, like you said you see happening.

[M. Saada + 6]

On ‎8‎/‎4‎/‎2018 at 12:18 AM, 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.

Traders are short termists. They are driven by making buy/sell profit using market trend analysis technics (fundamental and/or technical). That is the way they make a living. markets gurus and Analysts make their living by talking and advising and selling their views to media, banks and others. So this works for short term forecasting and good traders are those who make a profit from their bets on price direction. However, not every one in the market is a tarder; there are producers, refiners, service companies consumers, States, etc who are eager to know where price is heading. Unfortunately short termism ignores long term  forecasting and some big banks tried to fill the gap such as Goldman and others in 2008 and 2014, but  got it all wrong. The main reason is because the long term  trend is overshadowed by short term reality and wishfull thinking. So the only way to approximate an long term price is by relying on the commodities cycle. As we can see right now all the commodities prices including Gold and Oil) are trending down when everyone is predicting severe oil supply disruptions. Well, the commodities cycle does not seem to be bothered by short term risks and reflects supply and demand conditions in reaction to economic and demographic growth trends. Yet we all need to know where price will be 2, 5, 10 years from now. For the moment, the cycle is telling us that despite short term risks, oil price is more likely to remain below 80$ unless the Iranien situation get out of hand.

[Top Oil Trader + 469]

So some of you new to trading some never did it. Remember the stats 95% never make money, and the ones that do give it all back and then some, maybe a shirt or two. Like I said I watch lots of traders and analysts daily,  Let take an example here is someone who from looking at how he traded has at least 10 years experience, he knows something for sure. But this guy was trading 1 Mill last Wednesday, and now by end of today his balance will be a big o. Graph. This guy or lady is someone out of chile, now 30% in the red. Reminds me of the great actors who go on meth and destroy their careers.

[Top Oil Trader + 469]

M Saada good point. Yes you are right about lots of things you said. Now about the Iran war. Take it for a fact that it will happen, 150 missiles hit israel this week. If Israel pulls the plug, its all over. Then $80 will be a low ball target. Of course i dont hope for war, but based on what we are seeing, its not if but when. Sanctions will take into effect, and will probably increase. Venezuela production will really get out of hand and so will Libya. But take this for a fact,just when prices are the lowest and everyone is sure its over, that is the time to buy. This happens in almost every crash. If you remember when dow was 26636 this week i said i see it go down 2000 points so far its down 150 points since, not sure how to find my own post, but its there. Just before that everyone was bullish and the dow even went up 15 points.

Edited August 10, 2018 by Top Oil Trader

[Top Oil Trader + 469]

Since I wasnt looking at the details of the very small price moves of oil, since im just looking for where it will eventually will go. I am now looking also at the daytrading situation of oil.  I did trade oil for a while at 75 when it started collapsing and a bit up , but stopped for a couple of weeks  when it started ranging, but I knew it would go up.  With all the negative news on oil, and it going down, all of a sudden it is now trading at almost 68.  Can it eventually continue up? well of course. But like i say many times not without volatility which is usually. about 150 points some times almost 200 points, and sometimes less than 150 points a day. Just some minor details you need to know. Or in laymans terms it could be 70 one day and 68 the next. And then 66 then 68 then 70. then... But focused mostly on forex since i saw the big plunge coming quick, in oil, with all the noise, could be nosier than a heavy metals concert. Besides as you can see, oil I think is the most volatile of the big instruments, of course some small instruments are a lot more volatile, and therefore extremely risky, for me a no go.

[Top Oil Trader + 469]

Maybe one day i can give an example. But if you can daytrade trade oil, and be successful say 70% of the time, you could probably trade anything else blindfolded, in a dark cave.

[Top Oil Trader + 469]

Ok looking at the dow its at 25250 now I think i said i was going to drop at 26636 about 2000 points, so right now that would be a 150 point drop nothing big, but its a beginning, if 25000 breaks see you below, way below.

[Dan Warnick + 6,100]

31 minutes ago, Top Oil Trader said:

Ok looking at the dow its at 25250 now I think i said i was going to drop at 26636 about 2000 points, so right now that would be a 150 point drop nothing big, but its a beginning, if 25000 breaks see you below, way below.

Big enough, and it's at about a 197 point drop as I type this.  I took a small number of options on it using an inverse ETF and I've made a nice little return.  My options are good out to 70 days from now, so I can take a little back and forth before cashing in, or losing a bit .  I have a lot more contracts on the S&P500 dropping and that is playing out nicely.  In percentage terms the S&P500 inverse ETF went up about a 1/2 a percent more than the Dow one did, so that's good as well.  I didn't have very much free cash not tied up when I opened the Dow trade, so I hope the S&P trade continues to track well.  I believe it will, but let's see.  Hoping for that drop you predicted, and please note, other than the small Dow position, I was already in the other contracts before you even spoke of the Dow.  Your comments just gave me a little more hope, that's all.  Thanks for that, though!

[Doyle Johnson + 14]

Good article, I always have this (paranoid ?) feeling that I am not getting good accurate information regarding global production, demand and storage numbers, but who really has that valuable information? I think I am getting most reports, but maybe not, I follow API, EIA, IEA, rig count, Opec report, EIA 914 report, Bloomberg, Reuters, Oil Price.com, seeking Alpha's HFIR etc. where else can one go?. Genscape and other orbital surveillance companies claim they can determine global inventory builds and draws and provide that information in advance of major official reports, if so, and it is really accurate, it should be a definite edge for investors, speculators. I sometimes think ( feel ) I know what all the other oil investors out there are thinking, however that has not always worked out in my favor. My most successful strategy has been selling premium on long dated naked short puts on WTI, USO  under certain favorable conditions such as lower support levels, high IV. Would appreciate input from you more experienced traders, I know you are out there.  Thanks.

[catch22 + 244]

wow - seems i missed an exciting last day of trade for the week - just got back into civilization after a long weekend away in the outback

So it seems on fridays trading session the USD index ( DXY) finally broke out to the highside of a range it had been stuck in for a number of weeks. The same therefore happened to alot of other currencies its traded against including some of the important ones i follow. Im absolutely bummed once again as i cancelled a short order on the AUD which would been a stellar trade on friday as i knew i would not be with an internet connection on friday and didnt feel comfortable with open positions during that time - the AUDUSD pair dropped more than a 100 points, as did the EUR and some others!

As for oil - it ended still within its normal range - which based on what ive seen, is between 66.50 - 70.00 for WT crude. This to me means it was very well supported around the 66.5 level where it has touched several times but not been able to break below despite the strength in the USD. With a strong USD index breaking out to the upside, a weak oil market should have seen the oil price break lower but it did not, it traded up for the day and closed at the upper end of the days range. This seems bullish for oil, and it will be interesting to watch what happens with the USD index next week - if its a strong break it should keep climbing higher, but it could be viewed as an overly optimistic move and gets traded down back into its range again. Mondays session should clarify that.

If the petrodollar does keep climbing, i dont see oil going north just yet, it will probably stay within a range weve already established and the OPEC cartel seems comfortable in keeping it there. However if the DXY falls back again - then i expect we could see oil begin its trend upwards - potentially very rapidly given the support it got when the petrodollar did the same

Thats my 2c - next week should be an interesting one!

 

Edited August 12, 2018 by catch22

[Top Oil Trader + 469]

Based on friday's action even though it went up, based on the charts, there is yet to be a real long signal that will tell us the trend is continuing up. Which means oil could still drop from these prices. However, there is some hope when I look at a longer term chart,  it shows potential, for an uptrend reversal of a target around 79, However the uptrend move has yet to start in earnest.

[Top Oil Trader + 469]

With regards to the dow jones, my prediction in an earlier post at 25,636 last week, was that the dow would go down 2000 points. So far its at 25345 so a 300 point move, however It looks like it may have some up move from here, and if it can't break that ceiling 25,000 it should then proceed down to about maybe 1200 points before taking a rest or reversing, so really first major down target should have been 1500 points from 25636,

[catch22 + 244]

All the risk currencies gapped lower on the open this morning... market is still in a very risk off mood... cant wait to see what the wall street session has to offer

Im looking for pullbacks to go short on risk assets inc risk currencies and share price indexes...

oil is traditionally a risk asset as i understand it - the fact is has been unaffected in the global risk off climate speaks to its strength at this moment IMHO. Broader pullbacks in the risk assets could trigger oils final downward movement, it could get simply get caught in a global sell down if it materializes... if not, i expect oil to put on some big gains if the mood changes to risk on again!

Edited August 12, 2018 by catch22

[Top Oil Trader + 469]

Yes you are right there will be a pullback here, especially since noone is sure why the dow just dropped 300 points, and most will take this as a buying opp.

[catch22 + 244]

risk assets in freefall now, cleaned up some tidy profits on the AUD vs JPY and USD... still going down as i type... good days trading so far 😎 just keep selling the rallys on risky assets!

Edited August 13, 2018 by catch22

[Top Oil Trader + 469]

yes they have been in a freefall since 2 weeks now. I am looking again at oil.  If I just focus on charts, it does look like my original target of 62.5 is reachable. And the 66 reversal, was a dead cat bounce. High prob we now reach 62.5 first. Lesson learned don't stray from your first target, however, the 66 did get us to 70 as i expected, and it looks like this could be it. The reversal from 66 just looks really weak.

Edited August 13, 2018 by Top Oil Trader

[catch22 + 244]

Oil is too risky to be involved in right now..., easy money in forex and equities as the sell down continues... oil lacks direction and could go either way, i dont see any trades in oil right now...

The NY trading session hasnt even started yet, when it does, expect the carnage to accelerate IMHO... all major indexes are down in asian trade, swiss franc , usd and yen safe havens are way up and the big money in london and NY hasnt hit the market yet...ready your short setups 

 

 

Edited August 13, 2018 by catch22

[Top Oil Trader + 469]

Oil looks like it will have another bad week.Looks like 75 will be the high for a while.

[Top Oil Trader + 469]

Of course oil is risky, its like riskier than.... jumping into a snake pit, but that is for holding long term, Short term trading oil is like a piece of cake if you are watching it seriously, and you understand a little better than most how prices move.

[Top Oil Trader + 469]

Well notice the market initially fell almost 200 points and quickly saved itself, they need to protect the 25,000 level, if that breaks, then roller coaster. Oil on my fast charts look like its getting ready to sink.

[Top Oil Trader + 469]

So the move up to 68 was indeed weak, I can see this, since firstly I am not trading oil, but just looking at the charts when I get a chance. However to see clearly what goes on, I had to set up 5 charts, that gives me a clear intraday perspective. But oil (WTI) still looks weak, the week weak (sorry for pun) hasn't started yet, but soon people will wake up, and black oil will hit the fan. A big drop is soon imminent.