I trade in MCX-India as I am a very small trader and in a learning phase. MCX is a exact copy of international market.It is like watch international market and trade in local.
I felt commodity carry position is for big guys as they move the market. We are just an audience and ride the big moves with our little money. This is what i observed so far in commodity. In big move if I can get 0.3-0.5 % would be good enough for me.
In my view Day / swing trading also risk here without any strong news. I am not sure what is the name for my style of trading. But it saves me at least from BIG loses.
Thanks av, I will come back to your comments a bit later…
Although yesterday’s price action was very erratic the range on the day was small and the close pretty much unchanged on the day. This new range which is loosely and very broadly around 51.50 to 50.50 seems again to be forming a stalling zone for both bulls and bears.
The flavour of the moment seems to be back to the oil glut and OPEC/NOPEC’s chances of reducing it back to the 5-year average and raising prices towards the $60-70 range. The bulls are banking on an extension to the current agreement that ends in June to the end of the year (meeting on May 25). Whereas the bears are focusing on the record increases in production in the US and increases among other countries not participating in the Non-OPEC group, which they see as countering the impact of OPEC-led cuts.
The simple answer is: time will tell!
One comment I saw seems to underpin the complexity of this issue of balance between supply and demand and whether prices rise as a consequence of balance or not:
[I]"The latest IEA Oil Market Report stated, “It can be argued confidently that the market is already very close to balance.” What does that mean?
Market balance means that production and consumption are approximately equal. That is an important first step for a market in which production has exceeded consumption for most of the last 3 years but it hardly means that $70 oil prices are around the corner.
Market balance must be expanded to be useful: production is not the same as supply, and consumption is not the same as demand. Supply is production plus inventory. Demand is the quantity of oil the market is willing to buy at a certain price–it may be either more or less than production.
[/I]
Daily chart shows the current zone. We are struggling at the bottom of this and there is clearly still vulnerability to further falls (as voiced by some senior people in the oil industry):
The 1H chart showing flattening but still no sign of an upward turn in prices:
…and an interesting “spring” picture from Reuters that has nothing to do with Crude Oil at all (unless we extend content to include global warming issues): 
Residents view the first iceberg of the season as it passes the South Shore, also known as “Iceberg Alley”, near Ferryland Newfoundland, Canada April 16, 2017. REUTERS/Jody Martin
Out of the topic but just to share , today I am in Natural Gas.
Sounds like you have a very pragmatic and sensible approach to your trading!
Seems the MCX is quite a big exchange nowadays. What are the Crude Oil prices there based on? Do they follow Brent or WTI or is there a more local reference type?
Yes, we are all only minor, insignificant participants in big markets, whether we are talking of currencies or commodities. But even though we are not, even collectively, big enough or coordinated enough to have any impact on market movements, we do have a noticeable role.
It is because of our collective volume and varied positioning that we provide some of the liquidity and continuity that the markets, and brokers, thrive on. In the same way that even the biggest river accumulates from a multitude of tiny raindrops…
…Good luck with your Natural Gas today!
Price range has been very tight and directionless since last night’s close (50.695) and is trading right now at 50.69. We are still under that green cloud and even below the Daily Pivot all day so far.
Since it seems that US production v. OPEC cutbacks is the current focal point, the Baker Hughes oil rig count later today could be very significant and if there is a significant increase from last week’s count at 683 then we may well see a sell-off into the weekend.
Here is one graphic showing how the rig count has been continually growing over the last year. There are however, a number of opinions that the actual number of rigs is no longer so critical as there are a number of wells that are dug but not producing (DUC’s). For example, in order to maintain drilling and rental rights. But in the current climate, a high number will almost inevitably feed the current negative bias.
With your experience, do you see a way to get to know traders sentiment? I am just thinking . May be vague but testing is needed.
- identify good number of forums ,
- Fix the time frame like day or from start time to end time
- Fix the key word by experience or the down the line can be changed
Later this can be further sliced with particular type of users based on forum rating - Do simple analysis with those key words , may be simple count would be good enough
- Combine that with your knowledge and decide
No Manual work, just run few scripts that will do this kind of tasks in seconds.
May I know your thoughts?
Crude is tempting for intra, but no rule violation since the cloud is flat , no traders from forum has correct direction and i feel the temptation and not the direction.
Great and clear move today , have you tried sir? I did after seeing the nice down side cloud
So you mean gathering views from commentators on various forums?
To be honest, the idea does not inspire me. Generally, commentators can be divided into two groups: those basing views on fundamentals and news, and those interpreting their own technical analysis of price.
With fundamentalists, hardly anyone posting on forums actually has any first hand information on which their views are based. Everyone checks through their various favourite information sources and compiles their view from that information second hand. If various people happen to access the [I]same [/I]info sources and come to the [I]same [/I]conclusions it does not make their view any more correct. Also there are almost always views in both directions and it doesn’t make any sense to try and rank or “average” these.
Also, what some people think and say is a different matter to what the same and, more importantly, other people are actually doing in the market.
If you are already using technical analysis then you are really only attempting to achieve the same result through a different avenue - and one which, in my opinion, is far more unreliable.
With technical analysis, my philosophy is that no matter how much I read or communicate with other people, I will never know what the majority opinion is, nor what the majority of people are actually going to do in the market - but I [U][B]can [/B][/U]see what they are all actually collectively [U][I]doing[/I][/U].
I can assume that, regardless of what people think, the only thing that really affects price is what they each actually[B][U] do[/U][/B] in the market. And the end result is that the price will move in the direction of the majority force at any one time. Therefore by analysing price I am analysing what the majority of participants are doing even though I don’t know who they are or what they think. I do not need to also try and ask them.
Therefore my own technical analysis will identify which direction the market is moving and how strong that trend is at present. It is then a simple probability exercise to establish which way it is most likely to go next and what risk/reward management to apply.
And, naturally, if one is trading off a technical method then it is essential to have trust in it. And if you trust your own analysis, what benefit is there is also seeking other people’s technical analysis?
However, I [I]do [/I]see an element of difference in what you are saying in that opinion does carry an element of predictive analysis of where we might be going next. But I am not at all convinced that there is any reliable source of opinion, or indeed a collective analysis of various opinions, that would reliably act as a sentiment indicator for trading purposes.
There are various sources of traders’ open positions data like, for example, COT and FXCM’s Speculative Sentiment Index (SSI), etc, but I have not personally studied those much at all.
But this is all just my own humble personal view, I don’t know if it helps at all…
Well done!
As I said this morning, the Hourly chart was still looking vulnerable to the downside and the price had stayed below the daily Pivot all day. The short trade signal confirmation really came on the 15m chart after price spiked very briefly above the Pivot but then closed firmly back down below again. A short position with stop above that spike and…
Thanks Manxx for sharing your thoughts and it makes more sense to stick to what you are good at it.
Sorry if I am spoiling your thread as this is my first interaction in forums. Getting back to silent mode and will read your writings.
You are certainly not spoiling the thread in any way! You are more than welcome to bring your thoughts and ideas here anytime. You have already added to the overall content here - thanks
Even a casual glance at the daily chart shows that we have seen a significant drop in prices this week, in spite of continuing strong opinions that the OPEC/Non-Opec agreement will be continued as from June.
Prices have dropped considerably back towards lows seen in March and also discounting over half the increases seen after the OPEC agreement was first announced at the end of November last year.
But the concerning factor here is that this is in spite of fact that the OPEC led group has achieved an extremely high level of compliance with the agreed cuts. The conclusion being that continuing increases in other countries’ production, notably the US, is compensating for these reductions.
The problem for OPEC is that if they continue their reduced production levels for a further 6 months, will they start losing their market share as other producers fill the gaps - and without necessarily even achieving the desired price rise that should already be starting to appear.
On the other hand, if they abandon their production cuts in order to preserve and protect their market share they risk pushing prices further down and reducing their revenues in spite of their higher exports.
Whichever way they choose to go, there is a risk that they will fail in managing to reduce global oil reserves, and in driving prices higher, and that they will continue to feel pressure on their overall state revenues and available resources for future development of their industry.
Not much change in oil after an otherwise important and eventful weekend in politics.
Technically, the charts are, naturally, still negative.
We are now approaching the daily 200 sma and the upper edge of the support range earlier this year. The further we drop into this range and below $50 the more likely we are to see some buying appearing and maybe more “peptalk” from OPEC.
For today I am not really expecting anything major one way or the other in the early hours, but let’s see where NY takes us this afternoon. We may well see a touch on that 200 sma around 49.00. On the upside, we could reach the bottom of that broad range around 50.70…
Here’s the current daily chart.
The 5-day short (entry level 52.275 on 18.4.) now has a stop way up there at 53.185 (high from 17.4. WTI) so not much chance of seeing that today (with the caveat of the ever-present unexpected geopolitical events) - just shows how fast and furious the fall has been.
Well with a low of 49.01, I’ll take that as close enough!
I have been out of town all day, so I haven’t caught up with any news. Catch up tomorrow.
Here’s the updated daily with a couple of hours to go to the close:
I thought I’d add here the 4 Hour ribbon chart for the entire current down move. A clear move example of MA’s at their best!
Interestingly (at least for me) the turn here once again reflects the reversal of the High-5 method from long to short on the 18.4. (ringed in green). The previous long had already been signalled as over in the area of the red ring where both ribbons had crossed-
I am really looking towards when this 4Hour turns and how it matches the next High-5 reversal.
One issue that is often raised on BP is that technical indicators are bad because they are lagging. My response is always that Price Action techniques are just as much a comparative technique as an indicator, and in many cases even more so. Without some kind of comparative study between where we are now and where we have been before - and why, it is very difficult to establish a view on where we might be going from here. In this sense “lagging” information is a virtue.
But there is another kind of lagging info, which brings with it a need for great caution. What I am talking about is market commentary. The web is full of commentary on just about anything and it is obviously good to follow what is going on in one’s area of interest - but is it good as a base for trading decisions?
A good commentator is often not actually directly employed or involved in an industry, but has good contacts from within that industry. This means the explanation of what is happening now is credible and valuable but is already, by definition, priced into the market.
As a result, what tends to worry me is when all of the good commentaries are all focusing on the same issues and with the same conclusions…
After 6 days of significant crude oil declines, all the commentaries are concerned with the same thing - how far down we are going to go. Is it $45 or $40 or even $35,… and the reasons why this is going to happen. Today I have read about:
-
OPEC cuts are not achieving anything so far and therefore will not in the future either
-
the 11 non-OPEC producer countries that are included in the cuts will not necessarily wish to continue
-
the summer gasoline consumption will be less than expected, adding to crude build-ups
-
shale production and rig counts increasing in US
-
general global demand for oil decreasing as a result of marked-down estimates in GNP growth rates
The charts certainly reflect this negativity but we are approaching some heavy previous support areas in the form of previous lows, an upward channel going back to last summer, and the daily 200 sma.
I see this as a pivotal area. If we break through these areas then it suggests there really are genuine fundamental pressures leading to more downside. But if we start to hold and fumble around these levels, then we may start to see the speculative shorts closing out and a rebound - and everyone turning their attention back to, for example, geopoliticals and North Korea.
As so often with market commentaries, when everything looks totally good or totally bad, it is time to anticipate a reversal!
Here is a longer term daily chart going back to last summer. It does look very vulnerable to further declines but I am cautious here in front of these big levels.
Having already done my short trade for the day (probably out again much too soon but let’s see!), I’ve now turned my attention to another term in the oil industry - the FPSO / FSO - used for temporarily storing crude oil.
These are vessels used by offshore drilling facilities to temporarily store crude until it is offloaded into tankers to avoid tankers having to wait whilst the oil is pumped straight on board. In some cases the production and storage are combined in the same vessel, in which case it is called an FPSO (Floating Production Storage and Offloading).
In addition to storing crude temporarily in between tanker loadings these storage vessels are also used by oil companies to store crude longer term in anticipation of higher prices. Iran stored a lot of crude in such floating storage as a result of the sanctions imposed on them.
Although these FSO vessels are often purpose-built, use is also made of oil tankers which have either been decommissioned from earlier use as tankers or are chartered for the duration of storage.
One example of a decommissioned tanker is the Seawise Giant:
It was built as a supertanker in the 70’s and was the longest ship ever built. Its length, at 458m was 15 metres longer than the height of the Empire State Building in NY(443m).
Is was so large that it could not navigate the English Channel, Suez canal or the Panama canal.
It was damaged in the Iran-Iraq war, salvaged, restored, changed owners and name many times and eventually ended up as an FSO off the coast of Qatar.
Eventually, it was demolished as scrap in India in 2010.
