Trading and Technicals

[Osama + 248]

As discussed---this is the second thread which will host all the discussions vis a vis technical and trading. This is an area where I would like to learn a lot. @Top Oil Trader, @ATK, @Dan Warnick, @catch22 -----please guide us with your valuable analysis and comments.

@Keven Tan---well you and I can contribute, a little to both.

Edited November 1, 2018 by Osama
typo in title

[Tom Kirkman + 8,860]

A dedicated sub-forum for Trading might be better than just a thread.

 

[ATK + 355]

12 hours ago, Osama said:

As discussed---this is the second thread which will host all the discussions vis a vis technical and trading. This is an area where I would like to learn a lot. @Top Oil Trader, @ATK, @Dan Warnick, @catch22 -----please guide us with your valuable analysis and comments.

@Keven Tan---well you and I can contribute, a little to both.

JJ has me and Catch22 blocked so their is no way we can ever have a meaningful discussion with one another. 

Honestly if you guys want to do this then we need to change how people call out price points, no changing your answers after the fact. Even you guys who are just listening, you don't have to trade in real life but the very least announce a price and in what time frame you believe that price will hit.

You will never learn how things work if things are not transparent, people can just brush their losses under the rug and only anounce their wins. Nobody benefits from this as it leads to false impressions about what works and what doesn't work.

 

[Osama + 248]

See this: Oil Looks Set For a Rapid Bounce:

https://oilprice.com/Energy/Energy-General/Oil-Looks-Set-For-A-Rapid-Bounce.html

Also;

Why the Oil Price Tailspin May be Short-lived

https://edition.cnn.com/2018/11/04/investing/stocks-week-ahead-oil-prices-iran/index.html

 

[Abdul Jamal 0]

what wll be the nxt trgt

[ATK + 355]

On 11/5/2018 at 9:24 AM, Abdul Jamal said:

what wll be the nxt trgt

Where do YOU think the next target will be?

[Osama + 248]

Oil drops into $61ish.

[GeoPolitics + 14]

I could see it bouncing in a week or so, but I'm still new and trying to learn the ropes better

[ATK + 355]

7 minutes ago, GeoPolitics said:

I could see it bouncing in a week or so, but I'm still new and trying to learn the ropes better

It's fine, we were all noobs at one point. Talking out trades help sometimes, why do you think it will bounce?

[GeoPolitics + 14]

Largely just because trump could make a deal with China when they meet at the G20 summit. It would ease some people's nerves about global demand. When do you think we will have an idea about Iran oil exports?

[catch22 + 244]

one thing ive learned about trading is not to try and guess the outcomes of events... take the G20 for example - yes trump could walk away with some kind of deal with china - the market is not expecting that it will happen, so if it does there will be a huge rally on all the risk assets as trade tensions evaporate. But how on earth can you predict whether they will reach a deal or not? you cant - so again its just another roll of the dice down at the casino if your making bets on that.

Same goes for the midterms - all the polls seemed to indicate the dems would take the house - now midway thru vote count theyre not so sure! Market is having a field day and volatility is high as the vote counting continues... not my cup of tea - im sitting safely on the sidelines. In general, i dont trade news or events like these as i see them as a 50/50 probability. I only take trades when the probability of success as i see it is higher than even.

Going forward, and again depending on the result of the midterms its wise to wait and see what the result is, as it will guide the future markets in quite different directions depending on the outcome. If the reps win both houses we could see trump ramp up his pressure and trade efforts with china once again as he will think his hard line is what the voters wanted and helped guide republican victory. Emboldened - trump could ramp up his rhetoric against iran and prevoke retalitory responses from iran, china and russia, and more... If the reps loose the lower house, trump will be forced to rethink a bit and will probably start to pull his head in a bit... he might think he needs to tone down his rhetoric on the trade war and other issues as he might think its becoming domestically unpopular, nevermind globally.

The markets are pricing in a rep win means good growth for USA as trumps expansionary fiscal policy and spending increases will speed up the economy in the US. The market is also pricing in the opposite if the dems take the lower house. I dont think anybody is expecting the dems to take both houses tho - and that would create another huge shock to markets.

An overheating US economy led by the US republicans in power, is bad globally and especially for EM markets as the US interest rate hikes will slow global growth - most economies outside the US are not ready for rate hikes yet and are still applying stimulus measures... it could even send some EM economies into recession or financial crises with insurmountable debt, crashing local currencies and interest rates they cannot afford to pay. This seems to be the main reason the rest of the world markets are so interested in the mid term election result...

[Dan Warnick + 6,100]

3 hours ago, catch22 said:

An overheating US economy led by the US republicans in power, is bad globally and especially for EM markets as the US interest rate hikes will slow global growth - most economies outside the US are not ready for rate hikes yet and are still applying stimulus measures... it could even send some EM economies into recession or financial crises with insurmountable debt, crashing local currencies and interest rates they cannot afford to pay. This seems to be the main reason the rest of the world markets are so interested in the mid term election result...

Good summary as usual.  Just wanted to add my 2 cents: All indications, at least all indications that I'm aware of, point to the Fed continuing with interest rate hikes, with the next one to happen in December.  Another 0.25% I believe.  Do you have reason to believe this may not happen?

[catch22 + 244]

No Dan, i do not. Forex markets have priced in an extremely high probability of a december rate hike in the value of the USD vs other currencies so its clear the markets are expecting a december hike. The shock will be if the fed decides NOT to hike this december which will see the USD drop sharply lower.

Furthermore, the markets are also expecting several more hikes in 2019 aswell - how many is not as clear as the december bets, but at least 2-3 more 0.25% hikes thru 2019 is being expected.

I read a comment from one of the fed board members (cant remember who) that the reason they are so hawkish on hiking is they are attempting to overshoot it a bit before bringing it back neutral as they are worried about the occurrence of a little overheating in the economy due to the past stimulus its been receiving.

So by overshooting with rate hikes - its an effort to nip it in the butt before their monetary targets get too far away from them and have to chase them down over a longer period.

 

 

[Dan Warnick + 6,100]

48 minutes ago, catch22 said:

No Dan, i do not. Forex markets have priced in an extremely high probability of a december rate hike in the value of the USD vs other currencies so its clear the markets are expecting a december hike. The shock will be if the fed decides NOT to hike this december which will see the USD drop sharply lower.

Furthermore, the markets are also expecting several more hikes in 2019 aswell - how many is not as clear as the december bets, but at least 2-3 more 0.25% hikes thru 2019 is being expected.

I read a comment from one of the fed board members (cant remember who) that the reason they are so hawkish on hiking is they are attempting to overshoot it a bit before bringing it back neutral as they are worried about the occurrence of a little overheating in the economy due to the past stimulus its been receiving.

So by overshooting with rate hikes - its an effort to nip it in the butt before their monetary targets get too far away from them and have to chase them down over a longer period.

 

 

Agreed on all points.  Thanks.

[Enduro Shop oil 0]

Please have someone explain why Russian vendors send procedures that no tank company accepts

[Osama + 248]

Oil gone bonkers---drops to $56.

 

@Tom Kirkman the same that was happening few weks back when prices touched 4 years high sems to be happening to the downside?

Cc: 

@Dan Warnick, @ATK, @catch22, @Top Oil Trader, @Keven Tan

Edited November 13, 2018 by Osama
detail

[Fritz Pregl 0]

what are your thoughts on the contango we're now seeing?

last time this flip happened was in 2014.

Edited July 31, 2019 by Fritz Pregl

[Osama + 248]

5 hours ago, Rejnal Tushe said:

what are your thoughts on the contango we're now seeing?

last time this flip happened was in 2014.

More headwinds for oil! You can see oil went from 4 year highs to a bear market in just 6 weeks!

[Keven Tan + 85]

8 hours ago, Osama said:

Oil gone bonkers---drops to $56.

 

@Tom Kirkman the same that was happening few weks back when prices touched 4 years high sems to be happening to the downside?

Cc: 

@Dan Warnick, @ATK, @catch22, @Top Oil Trader, @Keven Tan

For my stupidest thoughts to the past unreasonable uptrend and the crazy downtrend is the markets are way over reacting. One thing I could reasonably tell is the instability effects caused by Trump, so everything has been magnified. Looked up the past few decades of oil chart, I barely see a $20 up/down happened in that short period of time. 

I personally and with some others here believed the oil (WTI) would come down to a $65 range, and it did happen as expected. However now it has dropped even further and significantly. 

As now, the questions probably will be as following:

1. Is the oil at bottom yet? If no, then how much further oil will drop? 

My answer is YES, I believe oil will keep dropping for the rest of the month. Target  range will be as low as $50. 

2. When the next oil rally is going to happen and how much it goes up?

My answer is that really depends on how the G20 will turn out between Trump and Xi. If China fulfills the US demands and achieves an agreement, then most likely market will re-gain confidence and oil will go up again. Like $67ish by the end of the year. 

3. Will OPEC cut production to increase the price?

yes of course, they would but they will not. In my previously post I explained why Saudi will not try to bring the price up by cutting production, and @catch22 made additional comments to it. Iran will probably not attempt do anything soon since they just got waived. Then why would other OPEC members want to risk themselves for something meaningless especially the globa economy is delicate and geopolitics are intense, 

4. Russia? 

If I am Putin, I feel like the next recession is already there soon, why bother to make as much as I can at this moment rather than having a even lower oil price or less sell amounts at recession. 

To be honest, I didn’t expect that oil price could drop to $55 range that soon...  it is way too unrealistic. I am not sure what are these big players up to behind the scene, but somehow my feeling tells me there is something bigger coming up soon, and i don’t know what is it. 

[Keven Tan + 85]

By the way, I now track DOW and SPY as another major indicator to see how oil would go and also for Oil ETF trading purpose. I sensed that OIl ETF dropped 5% for few times even though Oil and Gas were both gained at these days. Reason was probably because of DOW was -400 more points.  

Why Cramer said $40 oil, because he knows that market is going to crash soon....  lol

[catch22 + 244]

Still a spread of $10... now prices have dropped this much, the spread as a percentage of price has put brent at a significant premium over WTI...

Why is the US not exporting more oil and being paid higher prices on the global market - i read somewhere there was a bottleneck in the infrastructure? Also - is there a bureaucratic restriction exporting oil to trading partners?

Whatever the reason, At a $10 premium (nearly 20%) on the global market - US oil producers could be making a bonanza exporting it...

Edited November 14, 2018 by catch22

[nostro200 + 19]

4 hours ago, catch22 said:

Still a spread of $10... now prices have dropped this much, the spread as a percentage of price has put brent at a significant premium over WTI...

Why is the US not exporting more oil and being paid higher prices on the global market - i read somewhere there was a bottleneck in the infrastructure? Also - is there a bureaucratic restriction exporting oil to trading partners?

Whatever the reason, At a $10 premium (nearly 20%) on the global market - US oil producers could be making a bonanza exporting it...

That premium wouldn't last long enough to be worth it., i.e; the spread would shrink in a matter of days. 

If wti reaches and stays at $50, for a long time, brent will soon correct itself to ~$57 

 

Edited November 14, 2018 by nostro200

[A/Plague + 50]

WTI   $54.30

[Osama + 248]

12 hours ago, Keven Tan said:

For my stupidest thoughts to the past unreasonable uptrend and the crazy downtrend is the markets are way over reacting. One thing I could reasonably tell is the instability effects caused by Trump, so everything has been magnified. Looked up the past few decades of oil chart, I barely see a $20 up/down happened in that short period of time. 

I personally and with some others here believed the oil (WTI) would come down to a $65 range, and it did happen as expected. However now it has dropped even further and significantly. 

As now, the questions probably will be as following:

1. Is the oil at bottom yet? If no, then how much further oil will drop? 

My answer is YES, I believe oil will keep dropping for the rest of the month. Target  range will be as low as $50. 

2. When the next oil rally is going to happen and how much it goes up?

My answer is that really depends on how the G20 will turn out between Trump and Xi. If China fulfills the US demands and achieves an agreement, then most likely market will re-gain confidence and oil will go up again. Like $67ish by the end of the year. 

3. Will OPEC cut production to increase the price?

yes of course, they would but they will not. In my previously post I explained why Saudi will not try to bring the price up by cutting production, and @catch22 made additional comments to it. Iran will probably not attempt do anything soon since they just got waived. Then why would other OPEC members want to risk themselves for something meaningless especially the globa economy is delicate and geopolitics are intense, 

4. Russia? 

If I am Putin, I feel like the next recession is already there soon, why bother to make as much as I can at this moment rather than having a even lower oil price or less sell amounts at recession. 

To be honest, I didn’t expect that oil price could drop to $55 range that soon...  it is way too unrealistic. I am not sure what are these big players up to behind the scene, but somehow my feeling tells me there is something bigger coming up soon, and i don’t know what is it. 

A very sound analysis. I agree with your points.

 

Regarding the G20 outcome...if nothing happens as I expect...Cramer will prove right

 

Pray tell me about the nature of prognostications you are experiencing!!

[Osama + 248]

A severe oil drop like the one that just occurred usually leads to a bounce for crude and equities---https://www.cnbc.com/2018/11/19/severe-oil-price-drops-often-set-up-bounce-in-stocks-crude-futures.html