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  1. #201
    Manxx's Avatar
    Manxx is offline Superior Master Contributor and Member
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    So the oil markets did get another hammering today and lost nearly another dollar!

    I guess one could (or maybe even should!) feel a little embarrassed about missing out on such moves, but I have to remind myself that when I changed over from forex to a physical commodity it was with the intention to trade primarily from the long side, buying value at low prices and selling at high prices - pretty much in the primeval traditional concept of a trader! It just felt that it would add a bit more meaning and tangibility to my trading. That still stands. But I must admit that I expected a bit more swinging up and down than we are seeing. This down move has been one way since the middle of April and is still going strong, as can be seen from the 4Hour chart, which is my core directional indicator:

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    But I have to remember that my expectation was that I would be taking far fewer trades and holding them longer, and in that respect I am very pleased that the charts have kept me out of buying anything during this down move whilst waiting for the value to appear. Obviously, I have taken some short term speculative trades on the short side but, for example, so far this month I have only taken two such trades.... And I am beginning to sense withdrawal symptoms............!

    But my aim is to be a commodity trader, buying low and holding for the high prices. And not buying in a falling market is precisely in line with that. It just makes trading (for me anyway) so much more real and meaningful after years of just following the ups and downs in numerical ratios between currencies - I just got bored with that...............

    The positive flipside of this downtrend is that I currently have much more time to read and learn about the oil industry itself, which is both satisfying in itself as well as useful in understanding the market I am trading (or at least, trying to! )

    Certainly the upturn will come, but when and from what level remains to be seen.........................

  2. #202
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    Manxx is offline Superior Master Contributor and Member
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    Yesterday was a significant crash in crude oil prices, reaching their lowest levels since last November when the OPEC/NOPEC deal to cut production was announced. In other words, there has been no gain in price since those cuts began, which was their primary purpose. There has been a small drop in crude stocks globally but not enough to significantly reduce the excess levels back to a 5-year average as planned.

    U.S. crude oil inventories have remained around record high levels due to the considerable and continuous growth in US shale production, bringing U.S. output up to over 9.2 mill barrels per day, which is apparently the highest since the summer 2015.

    All eyes are watching whether OPEC will extend the production cuts agreement on May25 to the year-end - and it is generally accepted that they will. But the fact that prices have already failed to respond to these cuts so far, it raises the question how will an extension on the same terms succeed any better than the present cuts so far?

    The globally high level of crude stocks is still well above the target levels which would bring balance back to the market and OPEC has to struggle against continuing growth in US production, higher output from other producers not included in the OPEC/NOPEC deal, and the struggle to maintain a high level of compliance with the terms of the agreement, and avoid cheating within the 23 countries comprising the OPEC/Non-OPEC group. This is particularly relevant since the first half of the year is a maintenance period with a naturally lower production rate anyway, but the second half of the year is usually a period of expanding production - and many producer countries are badly in need of revenues to meet their spending budgets.

    Whilst demand is indeed the "other half of the story", there is little sign of global economic growth exceeding current projections, and, in some instances, the opposite is the case.

    I am thinking that I will have to consider seriously abandoning my aim of longer term trading and revert to the familiar short-term speculative, "Forget yesterday, ignore tomorrow, what's on the menu today" approach. Maybe this is a case of shutting the stable door after the horse has bolted, but I am not happy about missing moves that are staring me in the face.

    What I like about oil is that it moves distance when it moves. There is plenty of potential in day trades. But is also means looking into the spreads, which are higher for cfd's....I have to think about a possible change of broker this weekend. I have one in mind........

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  3. #203
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    Yes! Now I feel like I had my Snickers. Back to intraday stuff....

    I have no idea why the market sank so low overnight and bounced right back - I didn't find any new news. But anyway the price reached the top of the Hourly green band, still negative on the 4Hour and the 15m gave a sell signal. Bought it back a few minutes before the number just below 45....Oh but it feels good! Pips in the bin and a hot Friday afternoon

    I can't help pondering is it purely a question of rational analysis whether one trades long term or short term? Or is it just that some people are just born that way. I am so much more at home in a quick in/out environment....................
    Hourly:

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    Last edited by Manxx; 05-05-2017 at 08:56 AM.

  4. #204
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    Quote Originally Posted by Manxx View Post
    Yes! Now I feel like I had my Snickers. Back to intraday stuff....

    I have no idea why the market sank so low overnight and bounced right back - I didn't find any new news. But anyway the price reached the top of the Hourly green band, still negative on the 4Hour and the 15m gave a sell signal. Bought it back a few minutes before the number just below 45....Oh but it feels good! Pips in the bin and a hot Friday afternoon

    I can't help pondering is it purely a question of rational analysis whether one trades long term or short term? Or is it just that some people are just born that way. I am so much more at home in a quick in/out environment....................
    Hourly:

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    cause it touched a major resistance which has importamce since 2 years. no need for news in such cases. self fullfilling prophecy
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    Last edited by TURBONero; 05-05-2017 at 10:27 AM.

  5. #205
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    Good observation!

    Nice to see a bit of interest on the buying side going on here at present....or is it short covering! Either way, we have the BH US oil rig count in a while so will see if this bounce is sustainable into the weekend....................

  6. #206
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    Quote Originally Posted by Manxx View Post
    Good observation!

    Nice to see a bit of interest on the buying side going on here at present....or is it short covering! Either way, we have the BH US oil rig count in a while so will see if this bounce is sustainable into the weekend....................
    no observation. expected behaviour. planned action. patience.
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  7. #207
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    Baker Hughes Us rig count showed yet another increase on the week but only by an additional 6 rigs to a current figure of 703. A muted reaction since pretty much as expected and coming immediately ahead of Janet Yellen's speech in a few minutes.........

  8. #208
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    Manxx is offline Superior Master Contributor and Member
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    As we start a new week, here is a quote worth pondering no matter what or how we trade:

    "Ability is what you're capable of doing. Motivation determines what you do. Attitude determines how well you do it." Lou Holtz


    May we always remember that our ability is the foundation of our professionalism and educating ourselves is a continuous process without end.

    The more we learn, the greater our confidence and the stronger our motivation to trade diligently and intelligently.

    Confidence based on a sound ability means we approach our trading with precisely the right attitude that leads to a successful outcome.

    Happy trading!


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  9. #209
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    I spent some time over the weekend rearranging and revising the way my chart content is configured and coloured, so it looks a little different - but it is the same principle as always .

    Here are the 3 TFs 4H, 15, 5m. The 4H still indicates a negative underlying trend bias (in line with the daily, too). The 15m gave a good down signal early in the morning and the 5m has already provided two entry opportunities, as circled.

    Now it's wait and see what the NY opening gives us.......

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  10. #210
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    Default Who,What, and Why is OPEC?

    One of the key issues concerning the price of oil at present is the current agreement by the 13 OPEC countries and 11 other non-OPEC countries, including Russia, to cut their daily levels of production by up to 1.8 mill barrels per day. The objective of this agreement is to bring balance back into the market between supply and demand by reducing the current excessive global inventories, and thereby supporting oil prices at an acceptable level.

    The first 6 month agreement terminates in June and there is little sign yet that the oil glut has reduced at all significantly. Therefore the same group of producers will be meeting as part of the 172nd OPEC meeting in Vienna on 25th May, to decide whether to extend the agreement, perhaps to the end of the year.

    So who exactly is OPEC?

    OPEC is the Organization of the Petroleum Exporting Countries. It was created in Baghdad in September 1960 by its five founder members: Saudi Arabia Iraq, Iran, Kuwait and Venezuela, and has its headquarters in Vienna, Austria.

    OPEC's mission, according to its Statute, is to "coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry."

    Nine other countries later joined OPEC: Qatar (1961); Libya (1962); United Arab Emirates (1967); Algeria (1969); Nigeria (1971); Ecuador (1973); Angola (2007); and Gabon (1975). Indonesia joined in1962 but suspended its membership in January 2009, reactivated it in January 2016, again suspended it November 2016.

    Whilst OPEC is generally regarded as a cartel, its aim has always been for its members to work together according to its common recommendations and guidelines but in the past these have often been ignored by some member countries in preference for their own national objectives. Currently OPEC is working in a much more unified manner, where compliance with the current agreement for production cuts is approaching 100%.

    As of 2015, the 13 current member countries collectively accounted for about 73 percent of the world's "proven" oil reserves as well as 42 percent of actual global oil production. But at the time of OPEC's creation, the international oil market had already been dominated by what was known as the “Seven Sisters” multinational oil companies since the mid-1940s. These seven companies continued to dominate the global markets until the mid-1970s, at which time the "Seven Sisters" controlled around 85 percent of the world's petroleum reserves. These companies were:

    Anglo-Iranian Oil Company (now BP)

    Gulf Oil (later part of Chevron)

    Royal Dutch Shell

    Standard Oil Company of California (SoCal, now Chevron)

    Standard Oil Company of New Jersey (Esso, later Exxon)

    Standard Oil Company of New York (Socony, later Mobil, now part of ExxonMobil)

    Texaco (later merged into Chevron)

    Since that time, dominance in the oil industry has shifted to OPEC and the large, state-owned oil and gas companies, such as Saudi Aramco, Gazprom (Russia), China National Petroleum Corporation, National Iranian Oil Company, PDVSA (Venezuela), Petrobras (Brazil), and Petronas (Malaysia).

    Now that the US is starting to re-emerge as a major producer of oil, alongside other non-OPEC producers like Russia, it is to be seen how this will affect OPEC's ability to influence supply and pricing in the international market in the future.

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    Economist.com

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