Crude Oil and oil markets

If I’m polluting your thread with off topic stuff you must shout and we can discuss elsewhere.

For the sake of interest I’ve been looking at ETFs today because of our little pivot discussion. Well I’m not seeing the potential millions to be made out of pivots. But what I’ve noticed is that the amount of times an opening gap gets filled within the same day, next day, or third day seems to happen with an alarming frequency. I’m so used to the 24-hour futures contracts that I’ve not bothered to look at gap plays in years. Hmmmnnn…

Talking specifically here of the S&P SPDR and Dow SPDR.

No worries! That’s why the thread title is “…and other stuff” :+1:

To be honest, this is mainly just my “thinking out loud” journal and it really doesn’t matter where it leads. I write here because it is off the beaten track, so to speak, and doesn’t interest others. Which means I don’t upset people here! :smiley:

It is a strange phenomena with gaps but, yes, it seems a common understanding that markets do not “like” gaps.

Regarding pivots, I just completed my first trade on SP500. This was actually a typical set up that I would normally take so this was a live trade. I entered on a 30m close below the weekly pivot and put my target at S1, where we have already visited earlier today. We just approached it a moment ago but I didn’t get filled so I closed out manually for 50+pips rather than see it bounce back to the Pivot!

So one trade in the can. Perhaps I will still keep an open eye and mind on this, at least on slow days…

SP500 30m pivot

Nice.

Yeh. Been thinking along the lines of sticking to my 'lil 'ol corner (thread) and just staying there on my lonesome myself. I read new stuff mainly because I’m bored during the day if the truth be told. Then I see something that aggravates me so I open my mouth (really only in an effort to help or dispel some myths). You know: kinda like those people that cannot help themselves but to stop at a car wreck to try give some assistance (I’m not one of them). But I don’t think it endears. Seems to me that the notion of being able print money in this business has gotten even more traction over the years. One would have thought that with the proliferation of social media platforms etc. more of the scams and bull would have been exposed by now and people would be more wary but evidently not. Oh well. It is what it is I guess.

Gap plays. Yeh. Somewhere around here I have a nicely defined play for these. Think I’ll dig it out tonight and give it another read through.

Only really realized today though how limiting these ESMA margin rules have become (as much as I go out of my way in expounding their virtue). Those rules came in last year while I had long term positions open so they only affected me once I’d closed those positions and I didn’t trade after that. Jeepers. Just looked at buying Netflix. Not a chance possible at the moment i.e. scaling-in as per my trading system would margin half my account if I had to end up being totally committed. And my broker for some reason or the other only offers equities at 100x the actual price per share (of course the tick value is also multiplied by 100). Oh well. Have to wait until I get paid I guess. All good.

Nearly time for me to check for signals and start the laborious process of opening up some initial positions.

Hope you had a good day and have a great evening (what’s left of it).

Well, I guess the day’s end result is ok, one Oil trade at (only)+16+pips and this SP500. Small pickings but I’m happy that it is even green to be honest, what with oil jumping up and down and SP500 now heading back to the Pivot ( I would have been filled at the S1 level afterall)…

But it has been another frustrating day. What can one do when the markets are so jittery and traumatised that there is little substance to build any confidence in holding on to anything!

But if we can make something in these conditions then it can’t be all bad!

Do you mean the TPS thread? I have been there but it is not really in line with my type of trading so I haven’t commented there - but an interesting concept nevertheless! :slight_smile:

So the day ends and time to relax. Here’s another calming reflection from last weekend. I strive for the same composure and unity in my charts as I see in nature - is that also a kind of Fibonacci mentality? :joy:

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Actually just thought I’d better qualify that statement re: my broker quoting prices at 100x the actual price. It’s not “for some or the other reason” i.e. it’s because the trades actually go to the market (minimum 100 shares transaction) (as opposed to the trades not leaving the room i.e. “bucket shop”).

View aside: very high quality pics. I must say (also into photography and video and the like).

Yeh. My trading system (and thread) pretty boring and lack lustre I know. Only thing that’s worked for me though. All the “spectacular” trading systems I’ve tried have resulted in equally “spectacular” losses!!! LOL!!!

Oil markets yesterday were in a state of being busy going nowhere. On one hand, there was the comments coming out of the OPEC+ pre-meeting in Jeddah prior to the OPEC convention next month - and on the other hand, analysing the possible impact of the US restrictions on US companies dealing with Huawei, namely Android and several major mobile phone components.

It seems to me that the overall outcome of the Jeddah meeting was confirmation that OPEC is driving more for price stability than any major price increase. Whereas they are looking at the possibility of relieving the current production cut agreement of 1.2mb and increasing supply, they will only do this to address imbalance in supply /demand through outages or increased demand. But, at the same time, they are closely monitoring stock levels and will not allow any significant increase to again occur:

"Speaking in Jeddah ahead of a ministerial panel gathering on Sunday of top OPEC and non-OPEC producers, including Saudi Arabia and Russia, Falih told Reuters OPEC will not decide on output until late June when the group is due to meet next.

“I am not sure there is a supply shortage, but we will look at the (market) analysis. We will definitely be responsive and the market will be supplied,” Falih said, when asked whether an increase in output was on the table due to oil shortage concerns.""

So whilst oil prices should remain well-supported (and the long and short-term charts are supporting that view) it is hard to visualise any major rally with OPEC eager to increase supply when and if possible and with the current fears over the global trade situation.

In the broader picture oil prices and the SP500 are showing this correlation. And so, excluding intraday differences, we can justifiably assume that in the wider sense, oil markets will be more focused on the stock markets than on, for example, the oil supply situation from Iran and Venezuela:

Daily chart SP500 v. USOil since end 2018:

I have read several articles expressing the suspicion that the US is stringing out its trade negotiations with China in order to do its thing in Venezuela and Iran without the danger of excessive peaks in oil prices, which would be politically damaging at home. Coincidence or astute scheming? Well, I certainly don’t know, but in an era of cyber wars, trade wars and proxy wars, nothing is any more too incredulous to believe!

So where does that leave trading? I still don’t see any signs of a return to the long term trends in the early months of this year in SP500 or Oil, neither in the fundamentals nor in the charts, so I am still trading with a short term perspective of mainly buying dips and taking profits around the 50 pip level - bread and butter stuff.

Regarding pivots, I am intrigued to see that the current weekly pivot S/R are also reflecting and coinciding with some notable S/R levels on the oil chart (spooky?) :

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For the sake of interest:

That (so far as I can tell) is an 8-hour chart and was posted early this morning. Have you checked to see how this has played out thus far (Brent is currently moving up so just curious) (no point in checking on my charts).

WTI is currently still (just) below Monday’s high at 63.79 and sitting on last week’s high 63.615. Basically, it seems to be following the upward drift in SP500.

I am not in this, still waiting for a pullback, but the bias does seem upwards. However, I am nowadays nervous about entering on highs just prior to the US opening…:thinking:

If we close up here above last week’s high on the current 4H candle, I might take a long. I don’t like slow moving markets, they always feel like the bottom could fall out at any minute - and that’s how I feel about the SP500 right now - and if it were to break down (not saying it will!) then oil will be leaking after it.

My SP500 daily chart is neutral and USOil daily chart is positive - but, rarely for me, the fundamental picture is bothering me with buying either unless it is from a sell-off, not from a brief rally.

So I might be crying tonight how over-cautiousness missed a good trade, but rather that than slapping my wrists for getting sucked in…

Not much help really!!! :roll_eyes:

In other words it’s stalled right on those fancy lines of yours or what???

I wouldn’t say “stalled” yet, but not enough to convince such a cautious trader as me to go long here. We are only back to where we were Friday and Monday - but the bias is undoubtedly upwards at the moment…

Regarding those “fancy” lines, remember that the FIBR R3 is actually the previous week’s high - nothing
very esoteric about that one! But the R1 and R2? Jury’s still well out on that one! :slight_smile:

(just after I posted this, it has dropped back below that R3 - like I said, I want to see at least a 4H close above before being tempted!)

Ummmnnn… That’s definitely not stalled. That’s broken through. All things being equal then your lines could/should/would act as support (but how often are all things equal is the conundrum of course).

Was just curious really.

P.S.

Meh. Same could have been said for the last two attempts and look what happened.

You’ve lost me! Broken through on the upside or back on the downside???

This is the 4H chart that I watch most. We have still not closed above that R3/last week’s high level.

Interstingly, the R1 level seemed to coincide with some dips yesterday (ringed).

Just for clarification, the only lines I watch here (and always have done) are the previous week’s high and low and Pivot. Watching these interim pivot-based R1/R2/R4 and S1/S2/S4 is an entirely new adventure as from yesterday!! :joy:

I don’t actually talk in terms of supports and resistances - there is no reason why any such line would hold price through its own influence - I prefer to just call them “bus stops” where we pause whilst lots of people get on and get off before we then move onwards one way or the other! :slight_smile:

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On the previous chart it appears as though there was a close above one of those lines (far right i.e. second last bar). Now somebody like me would have gone long there and set my stop just below that last swing low point. Which I am guessing is but one reason why somebody like me should not be looking at this!!! LOL!!!

That is precisely why one has to always choose which TF to take as the key one, depending on one’s trading style?

Like I said earlier, I want to see a close above that high on the 4H chart which is my main chart for trading decisions. As you know, the shorter the TF the less reliable or premature are the signals.

But, as I think I’ve mentioned before, I don’t trade based purely on single lines. My charts need to “talk” to me and tell me a story of what is happening rather than just a horizontal line. I think you experience the same?

The principle on your TPS thread, if I understood it right, is that you build, e,g, long positions based on progressively more OS, i.e. on dips/pullbacks. I think the same basis should apply to these Pivot levels. I.e. buy on pullbacks from R3 to the R2/R1/Pivot levels and not chasing the price up through these higher levels? Or what do you think?

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You pretty much have it re: my thread. You’re effectively just scaling into a full position if the initial trade goes against you is all on a 1+2+3+4 units basis (a full position being 10 units).

Not sure it’s something I’d try with this or an other system for that matter. Problem with these levels we are monitoring is that I don’t have the confidence in them as to trade direction. There is no mistaking that with my system. Then again: only long trades if closing above the 200-day SMA and visa versa for short trades. Maybe a valid filter for these levels too??? Dunno. Maybe only looking for long trades if trading above the 200-day SMA and then only buying pullbacks to one of these levels??? Maybe??? Dunno. In other words you’d never be fading a move in the opposite direction.

Well that is close to what I was suggesting about buying above the weekly pivot and selling below it on pullbacks to these interim R levels.

We now have an example in the blue circle at the R2 level. I am still not buying into this but am interested to see what happens from here!..

Note, API oil stocks release later tonight…

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I opened a gap play (short DJIA SPDR ETF) at the US open for the hell of it. Most minimum position possible obviously. But this gives an entirely new meaning to the phrase “watching paint dry”!!! LOL!!!

Nah. This stuff ain’t for me. While I may be bored in the day I always seem to find SOMETHING to do (am never sure what I’ve done by the evening but SOMETHING anyway). But sitting staring at this??? Nah. Evidently I’m LONG past this stage of the game.

I hear you!

Look at this 30m chart on WTI - a 120 pip range since last Thursday! That’s 4 trading days and a weekend in the middle of it! And during a time when talk is about a Middle East war and a ramped up trade war between the two biggest economies on this globe…

Out of sheer boredom I took a WTI short when it dropped through the 200SMA (again) just now - saw it start to “perform” and then freeze - and now just closed it for a magnificent 6,5 pips “profit”!!! :roll_eyes:

You are right, there are better things to do right now! :slight_smile:

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Just sitting here found myself thinking:

The psychology of this is quite interesting. I mean I’m pretty sure if it was a decent size e.g. $100 per point then I’d be singing a different tune and would probably be on edge and riveted. And with hindsight: it’s pretty easy for me to now understand how a new trader and somebody who has not been through the ringer would be tempted to trade huge lots simply out of frustration and a need for action.