WTI @ $75.75, headed for $64 - 67

[James Regan + 1,776]

It’s quite interesting to go back and read these posts as it shows you that on any given day what one reads actually it’s PURE speculation. Speculating is what the oilfield was born upon. Pinch of salt no one really understands the markets as there are too many factors. Let’s see #oil #drilling #oilfield

[NAPHTA + 33]

56 minutes ago, catch22 said:

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.. 

Thanks Catch22! I know about the general definition of support line and your further clarifications about how to read the hourly candle was really useful to me. And yes TA is not anything more than statistically significant patterns, I am aware of that.

 However, as I am interested in Brent and your chart is about WTI, that is why I wondered at which level and how you determined the pivot point or support line for the uptrend in that chart. I assume you started from the starting point of the uptrend one month ago and perhaps from the bottom of the first candle that initiated the uptrend. Am I right or am completely wrong?

[catch22 + 244]

support lines run from the bottoms of the candles where the up trend began.

resistance lines - in a bear trend - run from the tops of the candle peaks drawn so that the general trend is respected.

As we are drawing this from whats already occurred in the past - we know what the facts are in terms of what the market respected in terms of trend gradient - its a known quantity. What we are looking for is changes to that respect - hence sentiment is changing or some other reason the market changed its mind about where prices should be going or at what rate it should be going.

see similar support line of brent best viewed on the 4H chart. but oil being oil, brent patterns on WTI they are very similar. It has diverged away from the support line quite some distance and the gradient of the price action was so steep... so its looking quite bearish for the beginning of next week - it will likely fall back a bit toward the trend support line as its just still too overbought - in addition you can see some bearish price action on the 4H candles at market close friday too. Alternatively - it could simply track sideways for a period which will eventually bring it closer to support line as time goes by. Once it gets closer to the support line - this is when id would be looking closely at buying opportunities if i wanted to go long. No way id buy where it is now. It will either turn back upward again somewhere before it gets to support (or on it) OR it will break thru to continue down. Once it gets closer to the trend line it wont be considered overbought anymore either - so all the big money could be looking to buy also. Remember the same big money is looking to sell if it breaks tho!

Edited October 6, 2018 by catch22

[catch22 + 244]

pivots points are another kettle of fish - i find them useful for a ranging market but not all that important in a trending market - so i wouldnt worry about these here and now as oil is clearly trending... i use the weekly pivot point in a ranging market to look for price action indicating a turn to then then catch the turn and trade the other way. So its for swing trading or contrarian trading. Traders look for contrarian price action around the PP levels to indicate whether the market is turning. Trend lines dont help much here as if the market has been ranging there no clear trend to draw any lines from - hence we use levels based around the weekly pivots - which are Fibonacci retracement levels based on the previous weeks full trading range.

I struggled to find an example last week as most markets trended - but heres 1 forex pair that ranged for the week and you can see how the levels are remarkably respected and how the market turns on or very near them. The exact level price is not important - its a zone not a specific price. Its an advanced technique to counter trade and risky going against a possible trend - very important to have several clear indicators telling you the market is turning and not just a small pause before it keeps going the way it was headed...

Dont worry about he resistance and trend lines ive drawn on chart below, - they are there to alert me of a possible change to the ranging market condition. ie - When it breaks these lines  - its also called a triangle pattern btw- then its likely we see further movement in the break direction and it may be the start of a new trend. So im not going to enter a pivot trade early next week knowing about this convergence triangle - i need to wait and consider the breakout first or i can get caught on the wrong side of a sudden break and prices usually move quickly when things break. So you can see its converging at the corner of the triangle and has to break somewhere soon. Wise traders wait for the break before entering otherwise its no better than a 50/50 probability... earlyier last week - without the triangle in play - several pivot trades both short and long could have been taken on this by an experienced swing trader...

Edited October 6, 2018 by catch22

[Top Oil Trader + 469]

It looks like WTI will first attempt to go for 74.85, before breaking 74. Now I see WTI hitting high 60s, could it go lower then yes, but if high 60s can hold then 80s are next. So to be able to predict if the uptrend will hold or break once it is retested is indeed at 50/50 probability which you can only determine at the time the TL is retested. The key concen now is not where WTI will go after it drops, it is only will it drop from here, or go to the 80s as the experts now believe, and been saying for the last month. You see they got it wrong last time with WTI hit 76, they said back then it would hit 80, 100, 150, 250, now too they are certain it has to hit, since this is the 2nd time it hit 76, so it has to for sure hit 80. The problem is most traders and analysts can only see   what is right in front of their nose, like putting a carrot in from of a donkeys nose, and making it go forward, it will go forward all day, hoping to eat the carrot, the same applies with analysts and traders. If the donkey would look behind and see a jerk laughing and holding a stick with a carrot he would not move any further. Same here if analysts and traders truly understood the history of crude the reality would  become self evident.

[Jo Mack + 43]

Oh so agree on Omarrosa!  She sold 33,000 books.  Couldn't even get Trump haters to buy her b.s..  

[ATK + 355]

28 minutes ago, Top Oil Trader said:

It looks like WTI will first attempt to go for 74.85, before breaking 74. Now I see WTI hitting high 60s, could it go lower then yes, but if high 60s can hold then 80s are next. So to be able to predict if the uptrend will hold or break once it is retested is indeed at 50/50 probability which you can only determine at the time the TL is retested. The key concen now is not where WTI will go after it drops, it is only will it drop from here, or go to the 80s as the experts now believe, and been saying for the last month. You see they got it wrong last time with WTI hit 76, they said back then it would hit 80, 100, 150, 250, now too they are certain it has to hit, since this is the 2nd time it hit 76, so it has to for sure hit 80. The problem is most traders and analysts can only see   what is right in front of their nose, like putting a carrot in from of a donkeys nose, and making it go forward, it will go forward all day, hoping to eat the carrot, the same applies with analysts and traders. If the donkey would look behind and see a jerk laughing and holding a stick with a carrot he would not move any further. Same here if analysts and traders truly understood the history of crude the reality would  become self evident.

Post a chart

[Top Oil Trader + 469]

didnt realize wti just broke 74, so this could be it, a slow drizzle down. I have noticed that most traders only look at what happened 5 min ago, and therefore trade in a narrow minded tunnel. if prices went up last 2 days, this is it, were in a uptrend and it will never go down. They cant see where the apex is, until crude goes down 6 bucks. Although there are some who can. Paul Tudor Jones is one of the few.

[catch22 + 244]

trend line support is beginning to break just now... just cracked below 74 and not yet candle closed on the 4H so it still could bounce yet. as this is asian session only, the bigger move will come when europe and US sessions open... what cannot be known is whether this is the needed pullback from previous overbought levels OR is it the beginning of a new downward trend... it is futile to attempt to make accurate predictions on the latter and how far it will go.

Edited October 8, 2018 by catch22

[Specul8r 0]

Price of WTI, $94 by December 1. Just a guess. I've worked in research park with group of well funded researchers who had various degrees, and Masters of Economics. They batted 500. My guess, based on the temperament of Iran when sanctions kick in. I'm betting all hell will break out by December 1.

[NAPHTA + 33]

On 10/6/2018 at 10:18 PM, catch22 said:

 

Catch22, Thanks a lot. I knew about the support line and trading it, but I have never even attempted to bet on or trade the pivot point. That piece was absolutely interesting to read. Thanks for sharing really. It seems that you are of the opinion that pivot point is significant only on a weekly basis. How about intraday? IF the movement can be compared with both hourly, 9 or 20 days averages, do you think a pivot point can be established or is reliable for a 4 hour intraday chart? 

[Dan Warnick + 6,100]

On 10/6/2018 at 10:16 AM, J S said:

China is not buying US oil.  Whose oil will they buy.....hmmmm.   How likely is it that they escort Iran oil tankers to china?  That would be vewwwey interrrrresting.

Interesting thought.  Are we there yet?  I hope not, but anything is possible and China hasn't really tested their physical power too much, yet.

[Top Oil Trader + 469]

Ok lets see if i can give you all the place where the WTI will do a head fake, and suck in bulls who will think WTI is going to retrace up.

So the first retrace comes in at 73.

Second at 70.

Third at 68 area.

It looks like if WTI goes that low, then the bulls after guessing wrong a couple of times, will take control, or at least try with a vengeance.

[Dan Warnick + 6,100]

7 minutes ago, Top Oil Trader said:

Ok lets see if i can give you all the place where the WTI will do a head fake, and suck in bulls who will think WTI is going to retrace up.

So the first retrace comes in at 73.

Second at 70.

Third at 68 area.

It looks like if WTI goes that low, then the bulls after guessing wrong a couple of times, will take control, or at least try with a vengeance.

It looks like the one thing everyone agrees on: it is a risky time to place your bets, unless you have a crystal ball.  I don't, so I'm going to watch my position at the opening and be ready to exit fast if it's not looking to be in my favor.

[Top Oil Trader + 469]

 

As long as you view trading like  vegas, 99% of traders do, then indeed every trade is very risky, which is why 99% of trader lose in the  long run. Yes they have a couple of wins here and there, but for the long run then end up negative,  or break even, or if they are lucky a 1k win for the year. Understand who you are trading  against. The smartest hedgefunds, opec, US, Citadel, algos, every time they take a 100 mill position, or bigger they will set you up alive, on a stake, upside down. Now if you think you can outrade them, best of luck, most dont even stand a chance, unless you can come up with a system, that you tested that has a high accuracy over the long run. If it only worked the last 2 months, then skip it. Most algos out there, that are for sale, for $200 plus, will stop working a week after you buy it.

[Dan Warnick + 6,100]

7 minutes ago, Top Oil Trader said:

 

As long as you view trading like  vegas, 99% of traders do, then indeed every trade is very risky, which is why 99% of trader lose in the  long run. Yes they have a couple of wins here and there, but for the long run then end up negative,  or break even, or if they are lucky a 1k win for the year. Understand who you are trading  against. The smartest hedgefunds, opec, US, Citadel, algos, every time they take a 100 mill position, or bigger they will set you up alive, on a stake, upside down. Now if you think you can outrade them, best of luck, most dont even stand a chance, unless you can come up with a system, that you tested that has a high accuracy over the long run. If it only worked the last 2 months, then skip it. Most algos out there, that are for sale, for $200 plus, will stop working a week after you buy it.

$200?

[Top Oil Trader + 469]

thats what an average auto algorithm costs.

[Dan Warnick + 6,100]

20 minutes ago, Top Oil Trader said:

thats what an average auto algorithm costs.

Where do I send the $200?

[Top Oil Trader + 469]

dont waste your money, but there are 10 of thousands of algos for sale

[Top Oil Trader + 469]

as a matter of fact some hedgefunds use many of them themselves, but lets assume those algos would have cost millions to develop and are not for sale, goldman also uses them, but its not for the public

[Top Oil Trader + 469]

Remember at 73 we get a small retrace, could last hours days, this is cant predict.

[NAPHTA + 33]

I maybe wrong but Imo, all those bots or algos do collectively, and on a daily or weekly basis, is to create a higher pace, because if there are 1000 of them out there used by different actors, of various qualities, then they take out each other anyhow. The real outcome will be higher speed. What is not distributed equally is the funds, the volume of money going in.So at the end, the guy with the bigger cash wins. Same old story, isn't it?

[Top Oil Trader + 469]

No indeed some hedgefunds are based purely on bots,James Simons is purely bots, i think he makes about 2 bill a year. so bots do work, i have created 1000s already i dont use them, would need too much capital to trade so many and then see if in fact i was right. but very few, can create bots that indeed are good, most i would say are worthless, or may have been good for the last 3 month, due to luck. and i dont have servers to let them run for say 6 month and see if in fact say i use 10 of them, to see what the actual results are. you see when i test them the results are astronomical, so i think it cant be true, but this is more or less how i trade manually. so who knows. Buy i have bought bots before, and was never impressed. But if bots work, yes they do for some hedgefunds, for goldman sachs, and of course the HFCs.

[Top Oil Trader + 469]

bots is simply putting your system into code, and letting it run automatically. you can pay someone 500 bucks theyll do it  or you can do it yourself no charge. good thing about bots u can back test it like 20 years back, in case of the dow even further. So people backtest it like 20 years good results, they give it a try in live.

[Dan Warnick + 6,100]

1 hour ago, NAPHTA said:

I maybe wrong but Imo, all those bots or algos do collectively, and on a daily or weekly basis, is to create a higher pace, because if there are 1000 of them out there used by different actors, of various qualities, then they take out each other anyhow. The real outcome will be higher speed. What is not distributed equally is the funds, the volume of money going in.So at the end, the guy with the bigger cash wins. Same old story, isn't it?

Point well taken.  Bot, who knows?