WTI @ $75.75, headed for $64 - 67

[NAPHTA + 33]

2 hours ago, catch22 said:

might be looming?id say a sudden movement in either direction is down right inevitable

Is a "looming surprise" a catch 22 in reality? 

For a correct philological reply, I have to ask my new Black Sea virtual acquaintance who is an expert in figures of speech:-)

[Top Oil Trader + 469]

Lots of traders now stuck in some longs at higher prices will hope the crude price will go back up, slight chance they will.

 

Bascilly so far the WTI range has been 50 cents there is a potential of it moving still another 2 bucks. Longs hoping that will be up. However, reality tells me, the move down is on a slingshot, and once they decide to move it, it will be fast and furious, and curious to longs.

[Dan Warnick + 6,100]

7 hours ago, catch22 said:

a bear flag / pennant pattern has been developing on the 1hr chart.. its looking to break later- history tells us the big action starts after NY session opens, and adhering to conventional pattern theory in a bear flag - it should break one way or the other - that should be the direction your looking for in the short term TF but you have to be quick in/out as oil often whipsaws here which is why its difficult to short term trade.  The lower low than previous level, and now bear flag after 3 bulls, suggests the overall daily move will probably be lower than current level, tho not guaranteed, as it can break either way and we still have a rising trend in play. Beware of the possible whipsaw or preceeding spike however just like so many before it shown in the chart.  Note the 3 bull flags prior to this bear flag. Lastly and most importantly - the rising trend support line - it has respected this line all week... if it breaks below this, its likely to rapidly slide down to the 72-72.5 area by market close friday evening. This pattern is irrelevant for long term direction of course... more of a daily direction. If i were to trade this - id be looking for a move toward 74 and then shorting if it breaks and not getting in too early - wait for the initial move to play out before entry to avoid a possible head fake spike the wrong way. If it clearly breaks the forming bear flag high, say above the 75.50 mark- then its back up to near 77 for a long.

Disclaimer - im not a pro trader, but this is my best effort at trying to figure its next daily movement...

 

 

Thank you for sharing your thoughts, analysis and experience.  Much appreciated.

[Top Oil Trader + 469]

Looks nice. Now it all makes sense. Hallelujah!

[ATK + 355]

3 hours ago, Dan Warnick said:

Thank you for sharing your thoughts, analysis and experience.  Much appreciated.

Yes, thanks for showing your actual thought process/graphs and not just expecting us to take you at your word 

[catch22 + 244]

update heading towards trendline but not broken yet so the bigger move still to come...

 

Edited October 5, 2018 by catch22

[Dan Warnick + 6,100]

5 minutes ago, catch22 said:

update heading towards trendline but not broken yet so the bigger move still to come...

 

If it does break below 74, you believe it will shoot down $2-3 before reverting to its long term rise, right?  So if a person was taking a longer view, they could wait until it hits $72-71ish before taking a long position for a good rise over the next 2-3 weeks.  Would that be right?

[catch22 + 244]

yes exactly - i stated clearly that this was trying to predict a daily move - nothing more... i find these daily moves quite a challenge

note that its now touched 74 and bounced back up... just this second - classsic spike

Edited October 5, 2018 by catch22

[catch22 + 244]

now that the initial phaze is over - im starting to look for an entry... still a bit early another hour or so will have clear direction in place - what im looking for is the candle to fully close on the 1H TF above or below break line...

Edited October 5, 2018 by catch22

[ATK + 355]

1 minute ago, catch22 said:

now that the initial phaze is over - im starting to look for an entry... still a bit early another hour or so will have clear direction in place

So you think it's back to business as usual? RSI was oversold a bit on lower time frames so things seemed like they need to cool off.

Let's see if buyers want to keep pushing this thing up!

[catch22 + 244]

no - ive just noticed that its not wise to enter early of you dont have a clear direction to trade. just like it always does this whipsaw thing - if you wait till the whipsaw is over - the likelihood of a clear direction improves IMHO - just look at the charted history on the 1H TF and you can see it repeat over and over... better to wait for the bigger move and just take a part of it rather than trying to get the whole thing,,,

Another idea of have for a short term intraday trade is simply enter early - on immediate flag break -  and only trade for the initial phase before the spike. wont take much profit from that tho only 10-20 pips

Edited October 5, 2018 by catch22

[Dan Warnick + 6,100]

Uh, then what just happened?  Shot up like an algo fueled rocket!

[catch22 + 244]

2 minutes ago, Dan Warnick said:

Uh, then what just happened?  Shot up like an algo fueled rocket!

yes - thats why im saying its still too early - wait another hour and we should see a clear direction in place - doesnt always happen that way but look at the history of the pattern - its repeated everyday this week, same time of day...

Also try to stay on the 1H chart - smaller TF are too erratic and confusing... you need to see the big picture and wait for 1H candles to close - if still within the flag range - wait another hour... thats the game

Edited October 5, 2018 by catch22

[catch22 + 244]

see the 1H candle is still active and within the flag range? - so we still dont have a direction to trade.

Based on prior history - we should see it on this candle or the next hour candle... this is why it sucks becasue you have to sit and watch and wait if you wanna catch it - when it happens it can be over within an hour also. Sometimes continues for a few hours but often the big move is gone within 1-2 hours...

 

[Dan Warnick + 6,100]

Just now, catch22 said:

see the 1H candle is still active and within the flag range? - so we still dont have a direction to trade.

 

Based on prior history - we should see it on this candle or the next hour candle... this is why it sucks becasue you have to sit and watch and wait if you wanna catch it - when it happens it can be over within an hour also. Sometimes continues for a few hours but often the big move is gone within 1-2 hours...

 

I'm looking for an entry point to go long on a 3 week options contract, so I'm trying to figure that out.

[catch22 + 244]

different ballgame Dan - for that id be looking at fundamentals and geopolitics to base a position from... there is nothing showing on the charts other than a steady upward trend if you look at daily TF. But its too overbought to buy into now IMHO... id wait for a bigger pullback to go long from - you might just get that by the end of today. And the pullback may continue early next week if it happens. You just have to take each day as it comes and look for a change in overall direction each day. my 2c

[ATK + 355]

1 minute ago, catch22 said:

different ballgame Dan - for that id be looking at fundamentals and geopolitics to base a position from... there is nothing showing on the charts other than a steady upward trend if you look at daily TF. But its too overbought to buy into now IMHO... id wait for a bigger pullback to go long from - you might just get that by the end of today. And the pullback may continue early next week if it happens. You just have to take each day as it comes and look for a change in overall direction each day. my 2c

From an FA stand point, im expecting yet another build next week. Could be what we need to go back to $72

[ATK + 355]

Looking at the 15 min, buying volume is a lot less than what it normally is

[ATK + 355]

Buyers stepping in, have a feeling we will go sideways today!

[catch22 + 244]

5 minutes ago, ATK said:

Buyers stepping in, have a feeling we will go sideways today!

could be - but still a waiting game... look at the history - biggest candles often form in the next hour... sometimes even the hour after next... however ill be in bed by then - as i always am over here in australia

Have a good weekend - ill check out how it panned out in the morning

Edited October 5, 2018 by catch22

[ATK + 355]

Yawwwwwn, just a boring trading day

[ATK + 355]

https://www.google.com/amp/s/www.marketwatch.com/amp/story/guid/31F171A4-C887-11E8-B749-3B074E7D01E0

Wow would you look at that, OPEC managed to surpass it's 1 million output goal in September. Where are all those analyst saying that they were "skeptical" OPEC could manage to do that? 

The same analyst who get weekly crude estimates wrong all the time claiming they know how much OPEC can or cannot produce or how much spare capacity they have, lmao yeaaaah okayyyyy suuuuuuuure you do.

Well now that that's settled, we just need to disprove the spare capacity argument.

Getting harder to speculate now that we are getting closer to nov and ACTUAL NUMBERS are coming out

Edited October 5, 2018 by ATK

[catch22 + 244]

so now checking what happened at end of week - the upward trend line was not broken so technically the bullish argument is still in play. However should that trend show a clear break - not just a candle spike touching - then the bullish trend will be broken and you can expect a pullback or a complete reversal into a downward trend - you cant predict which it will be only that there should be some sort of correction downwards - by how much remains to be seen.

The geopolitical arguments are clearly whats proppup up the prices - we have iran and also now russia playing spy games. US officials have been quoted saying "russia has been caught, and now must pay the piper..." hinting at possible further sanctions on Russia. This could really drive up the prices again but the US knows this and will likely play it reasonably cool as they dont want high prices before the mid terms... The UK and many other western countries are pissed at russia for doing this also.

Russia is clearly aligning itself with the rest of the East. They good buddies with China, north korea, iran, syria etc and increasingly trying to get Turkey on their side. With the trade wars on china - this is becoming an East vs West environment thats starting to look worrying to me...

Its hard to say that oil prices are likely to decline anytime soon IMHO...

 

 

[NAPHTA + 33]

Hi Catch22, Thanks for this early on comment. I was about to write and ask actually, because it looks like a clear direction downwards after breaking out of that Flag that you had identified. You write "should that trend show a clear break - not just a candle spike touching - then the bullish trend will be broken". That is somewhat unclear to me. Touching the support line, I guess, I saw one such line in your first chart, but it wasn't clear from which point you had drawn that support line. Would you mind to clarify that one?

About the geopolitics as part of fundamentals (because it can be translated into supply demand issues), there is a tremendous pressure to curtail the uptrend, partly due to the coming midterm election in the US, partly because those who initiated the oil embargo on Iran have to show they also can control the consequences of it. Nobody says it, but it looks more and more like a war situation with front formations. All this development is insane and extremely dangerous.

[catch22 + 244]

7 hours ago, NAPHTA said:

Hi Catch22, Thanks for this early on comment. I was about to write and ask actually, because it looks like a clear direction downwards after breaking out of that Flag that you had identified. You write "should that trend show a clear break - not just a candle spike touching - then the bullish trend will be broken". That is somewhat unclear to me. Touching the support line, I guess, I saw one such line in your first chart, but it wasn't clear from which point you had drawn that support line. Would you mind to clarify that one?

About the geopolitics as part of fundamentals (because it can be translated into supply demand issues), there is a tremendous pressure to curtail the uptrend, partly due to the coming midterm election in the US, partly because those who initiated the oil embargo on Iran have to show they also can control the consequences of it. Nobody says it, but it looks more and more like a war situation with front formations. All this development is insane and extremely dangerous.

A clear break of the rising trend line (which i drew on the chart just below the flag pattern) will invalidate the bull trend. As long as this support line remains intact- the price keeps rising. Technical analysis predicts that when this line is broken- you will get a strong move in the other direction and history proves this type of break, in this highly overbought evvironment, carries a very high probability. The market knows this and so they react accordingly and everyone starts selling when they see it break.

 

To recognise the break- the hourly candle must close below the line and the new candle opens below it also. Then you need to check lower timeframes down all the way down to 5m scale and they should all be showing downward candles. Once you can see all of these indications and price action accelerating then you can be reasonably sure the market has broken thru support and down she goes.

The technical analysis actually graphically represents real life market conditions between buyer and sellers- its not just pie in the sky stuff. The rising suport line represents buyers willing to pay higher and higher prices based on perceived value over a specified time period which results in the gradient. Same applies to sellers who think they can receive higher prices for the same reason and theres a tug of war happening resulting in the jagged price acrion you see on charts. However the general average can be drawn a reasonably straight line thru the middle of it all.

Perceived value is made up of all things from fundamentals to sentiments to tensions to risk moods to you name it. But technical analysis simply attempts to represent whats actually happening in a market in way that you can see it and draw conclusions from it in the same kind of way we use many types of statistical graphs like tbond yeild curves representing economic growth cycle etc - its a mathemarical and statistical representation and always carries an element of probability with it- nothing is ever guaranteed. However with statistics on your side and some charting analysis tools yeilding as much as 85% probability holding true- would you ignore that and bet the other way? Over the long term if you always place your bets with odds in your favour- over time you win more than you loose- thats the best one can hope for..