Yes it would be …IF oil can hold these levels and advance further. But we have been here before and somehow buying enthusiasm seems to run out of steam. We managed to touch $54 on WTI but immediately dropped back 50 cents.
I am watching the daily chart and we are still within last week’s range and well off last week’s highs at 55.725…and we are still in the “box” and holding below some interim resistance within it
I still can’t put my trust in a meaningful rally from here just yet - but longer term, yes I think we will see higher levels. In the meantime, our “company” strategy here is still to buy dips and sell out with a good margin
Sometimes people make things out to be more complicated than they really are. Mainly Crude Oil prices are influenced by inventories and supply/demand statistics. Politics plays a large role too, you can find the most important stories about oil in Reuters.
Even I’m an expert on trading oil; one tenth of the time.
Latest trump factor in Crude Oil seems to be maintaining a support level on oil that is adequate for sustaining western oil companies operating expenses. Won’t be difficult holding $45 for Brent Crude Oil while Venezuela has such serious issues.
The price manipulation on Crude Oil seems to mostly come from western oil companies and financial companies. Is Washington angry there are separate Crude Oil prices around the world?
@anon46773462 I hope you didn’t misunderstand my comment. The joke was on myself. According to UAdvantage It’s supposed to be simple but yet all I can seem to do is lose money this year.
And speaking of doing nothing but losing money, I ended yesterday up 0.5% thanks to XOM. This is one of the largest (and only) wins I have had so far this year. Looking at the markets this morning, XOM is up 1.2% while the SP500 is up 0.5%, This stock is really going gang busters. My MMP holding is up over 1% as well. I think both are benefiting from the energy rally right now.
Aye, oil has been a harbinger of risk in recent times - the China talk today for example.
XLE again leading the way on the S&P etf’s - often when you see the utilities backing off with the S&P on the way up then investors are feeling bullish:
I suppose today has been as good an example as it would be possible to get:
Difficult to tell the two charts apart, only the file names tell the tale.
Btw - this only for guys lurking/learning, not any previous posters - Manx is correct re ego.
Larry Williams once told the tale about his taking a public position on some trade or other.The trade was in his sphere of knowledge, so likely a commodity, he was basking in the publicity.
There was some sort of TV debate, a young trader disagreed with William’s position - this hurt Williams ego, after all he was THE GUY.
Williams lost… and lost - later he acknowledged that his ego got in the way of his brain.
Anyways, that’s me and oil .
Edit: File names not visible, first chart is SPX500, second WTI both today and hr1
Edit 2: US2000 new high for this year so far - consumer staples a loser today - suggests more risk on ahead.
Loser today also financials - retail sales…
Again only for lurkers/learners - a little post about risk and the market.
Many times it is possible to hear that the VIX index is a good measure of current risk and that may well be true.
Sometimes it’s good to understand how the market is thinking in real time - right now.
Small companies are risky - they are often newcomers to their industry or they have big ideas ahead of their market sector - Miscrosoft/Apple etc had to start somewhere.
Imagine that you are keen to take on some of this risk - the rewards are high (and too the risk).
So why not the small caps in Europe or Asia? - bottom line is that the market looks to the US for it’s risk appetite.
So is the market all about risk? - no, with e.g. wti today followed risk but the higher it goes the more inclined oil FA will take over - there is a point that the market will decide that WTI is high enough regardless of risk.
It is for this reason that correlation is always in real time - the now.
Anyways - how the USD2000 played out since the above:
And again for the learners - the relevance of the staples - in trouble times the market figures it’s best to invest in consumer staples, after all no matter what happens we need toilet rolls.
So what does the market do when feeling risk on? - dump the rolls.
Edit; guess who led the S&P up today - yep the financials, retail sales is yesterday’s news, the market is always thinking to the right side of the chart
I do not remember a time ever before when all the markets that I look at are so indecisive, even stagnant.
My mainstays this year, Crude Oil and SP500, have been “Trumped” into a state of loose neutrality, whilst EUR and GBP are deeply anaesthetized by Brexit.
But I have to admire the shrewdness of the US President in gaining two victories in one swipe and getting paid for it in the process.
Sending warships and bombers into strike range of Iran and uplifting the possibility of a war was sure to result in an unwanted upsurge in oil prices……… But that was neatly offset by a somewhat simultaneous weekend tweet threatening real increases in tariffs on Chinese goods just ahead of this week’s US/China trade discussions. The resultant threat of a further slowdown in global trade was enough to paralyse oil prices as well as numbing the stock markets.
If the tariffs threat results in a better agreement then the US wins, if not, then the US pulls in the extra revenues from the increased tariffs.
But, who, in the longer term actually suffers from these tariffs is another issue. Is it the Chinese exporters who have to lower their prices, or the US customer who has to pay more for the same goods, or is it businesses on both sides that have to endure painful contracting business levels and /or lose business to other companies in other nations.
Either way, for the first time for as long as I can remember, I am totally devoid of any trading ideas to match my continuing enthusiasm to be “out there”. Frustrating, but at least the garden is getting a lot of extra attention this year!
It’s still not unclear whether there will be rebound in consumer inflation in the US because after three rounds of tariffs Fed was inclined to loose policy because it fails to push price growth to the target level. Will the tariffs on all imports help the Fed?
But I think the main influence will not be from the tariff income direct but from the impact on overall economic activity both in the US and in the World in general. And that will depend on whether this ends up as a short term measure or for a prolonged period!
I cannot help thinking that the on-going, current huge US-China trade war is eventually going to be the subject of significant course material in the world’s economics courses.
It is big enough and prolonged enough, and global enough, to ultimately produce a lot of data on who actually ends up getting hurt the most in trade wars - and is there a winner!
These huge tariffs are essentially a tax on the importers of these goods. Although Mr Trump states that this extra income from the tariffs will be used to buy humanitarian aid, that is not such a pretty thought if the money has actually ended up coming from the US citizens in the first place in the form of increased prices for these goods.
And we shouldn’t forget to take into account the tit-for-tat additional tariffs that will inevitably come from the Chinese on US goods.
Seems to me there are several outcomes how these tariffs are met:
The Chinese cut their costs to the US importers
The US importers absorb some, or all, of the additional tax within their own cost structures (opportunities for which are probably already exhausted)
The importers raise their costs to the end-consumer
The ijmporters swirtch to other possible suppliers, including domestic
The importers just reduce volumes of goods that won’t sellat higher prices - or drop them completely
Actually, the markets are surprisingly stable considering the size of the issue here, so is that because no one can “guestimate” the extent of the impact and where it will hit - or a belief that it cannot surely continue at these levels for very long and therefore worth sitting out? And when it does end, everything will again be rolling along fine?
It will be interesting to see, as the US next presidential election start to raise its profile, how the US citizens will respond once it becomes clear whom the tariff tactics are hurting the most - the Chinese or the US itself. At present, the jury is, I think, still out on that……
Neither the SP500 nor the USOil markets are giving any signs of future direction from here (apart from not collapsing!) as the US-China trade war continues and we wait for China’s response to the latest substantial US increase in tariffs.
It was interesting to note some variations in interpretation from the US:
Mr Trump said that, “We will be taking in tens of billions of dollars in tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-tariffed countries.”
But Mr Trump’s top economic adviser, Larry Kudlow, said when asked whether it was correct to say that it was US businesses and US consumers who pay for the tariff: “Yes, to some extent. I don’t disagree with that.” “Both sides will suffer on this.”
The higher tariffs are paid by American companies importing goods from China. Economists have said a 25% tariff will be much harder for businesses to absorb than 10%, which means they are more likely to pass on some of the cost to consumers. Alternatively, they will seek other, non-tariff suppliers if and where similar goods are available with the right quality, charactistics and available volumes.
Further hints were made concerning a possible meeting between Mr Trump and China’s President Xi Jinping at the G20 summit in Japan in late June – before that is a long period of indecision for our markets!
Maybe of even greater concern right now is the situation with Iran. It is clear the additional tightening of US sanctions, including a virtually total restriction on oil exports from Iran, is starting to bite hard into to an already weak Iranian economy.The Iranian government is being pushed up against the wall and looking for a suitable response to this. Without ongoing negotiations this is a dangerous and volatile situation.
Brexit and the EU elections are also providing a similar degree of uncertainty in the GBP and EUR markets.
I don’t know of anyone on BP who is regularly posting about oil trading using only PA analysis.
I trade on a discretionary basis, watching the factors affecting the market and then looking at a mixture of signals from mainly MA’s and some S/R’s to identify when the price movement appears to be in confluence with my own view.
I believe that S/R levels can have a much greater relevance in commodity markets than in forex because commodities have an intrinsic value of their own whereas money has none. The current value of any currency is always relative to others and loosely reflecting changing demands in goods, services and investments as well as finance and fiscal policies.
Money has no intrinsic value of its own - that is more than evident if one looks at countries with hyper-inflation, for example! So, in my opinion, there is no real underlying reason why a currency pair should bounce off a particular level other than that it has done so previously! This is more akin to TA creating a limited self-fulfilment rather than any specific, identifiable, fundamental reason.
You are welcome to look in here if it helps you at all. My input is rather sporadic depending on whether there is anything significant to say!
I am currently rather neutral on which way oil prices go next, but there are a lot of very interesting things going on in the world at present and I have thought about stepping up my comment here - not that it will necessarily be of any interest or use to anyone!
Your input are really significant… i m sure of learning a lot from you in my journey towards oil…
i have a request if you could post a chart every day that will help me learning TA concepts along with your macro economic factors analysis (which is par excellence)
There are growing signs of serious distress in the Middle East and talk of proxy wars via terrorist groups against US forces in the region.
Whilst there is little concrete evidence available it does appear that Iran is seriously in difficulties with the sanctions against oil and gas exports and other measures. There is little evidence that other countries are willing to bypass the US sanctions and risk problems in their own relations with the US.
Some reports say that some Iranian oil tankers may still be shipping oil since some of their supertankers have disappeared off the tracking systems and may have transponders switched off. On the other hand, these large vessels may just be being used as floating storage to cope with excess production that is going nowhere.
One of the key areas where troubles could occur would be the Hormuz Straits where much of the Middle East oil is transported. I just read a report that yesterday two Saudi oil tankers were subjected to sabotage attacks in this region and the UAE reported four ships were targeted but with no casualties.
Oil prices are firming:
I am targetting that broad band of resistance just above the current price, which has just broken through last week’s high. The position is currently around 80 ticks but still a little distance to go…….
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