OK. I will try to keep up there too, although another week of building stuff is going to keep me away from BP a bit!
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Quite a seesaw day today. Looked like quite a battle between the bulls and the bears.
We have just managed to break up to that Weekly 200SMA, which gave at least a couple of nice intraday trades for a total of 76 pips. I am more than content with this on such a rock and roll day - but I will still be looking for a close above this line tomorrow before I can think of a longer term position.
I haven’t had a chance to check if there is any news behind today’s move - but worth remembering that tomorrow is NFP day and that may work some more magic here and at least provide the solution as to which side of that weekly 200SMA we end up on…
Don’t trade oil, but always appreciate your analysis.
That is very gratifying to hear, thank you! 
I am not very consistent with updating on a regular basis but that is mainly because i don’t generally really think anyone reads this stuff! So it is always very encouraging to hear when someone does!
I should perhaps try to be a little more regular and try to provide more continuity in the flow of things and not just think i am talking to myself!
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Quick note:
Seems today’s rally in oil prices was due to rumours that the US may well postpone the threatened tariffs on Mexico if current talks continue well. But as far as i can tell, President Trump had not actually agreed to such a move yet. The first 5% will probably be imposed on Monday in any case.
Considering the overwhelming bearish news from the EIA yesterday in unexpectedly high builds in crude inventories, gasoline and diesel, today’s rally demonstrates the dominance of economic growth issues over oil supply surpluses on oil prices.
Hi.
No comment on the above right now i.e. was in bed but got up to maintain my positions and certainly going back to bed as it’s flipping freezing here.
But I posted the below for you yesterday.
https://forums.babypips.com/t/tps-time-price-scale-in-revisited/215204/202?u=dpaterso
ADX still shooting straight on the daily in spite of the wonderful turn of events (price) late last night. But we shall see. From my point of view: another higher close and I’ll make money on these two positions after all that action (both in profit right now but no signal to close tonight).
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Crude markets managed a good solid day yesterday on the back of rumours that the Mexican tariffs may be short-lived ( a week or two) and only the first 5% tranche. The short term charts (15min) revealed strong immediate buying whenever price broke down towards the $50 range, which gave good credibility to an intraday strategy of buying into the dips.
But even though the day finished well and has maintained its gains, we have only just managed to creep back over the Weekly 200 SMA and only fingertips over the low of last week’s range. This hardly counts as a change in trend yet.
So far we are seeing further evidence of the view that market participants recognise a low around the $50 level (WTI). This is supported by a number of fundamental issues such as producer cost breakevens (i.e. you start shutting off taps when the price drops below B/E) and also that Russia has said it is content with prices around these levels (i.e. but not much lower – which can influence Russia’s attitude towards continuing the ongoing production cuts in the upcoming OPEC+ meeting).
But demand concerns are still overriding supply issues, there are still growing storm clouds over the impact of long term tariffs on slowing global economic growth. Today’s NFP may be one of those releases influencing the market for this reason.
One interesting example of the mixed impact of who gets hurt by tariffs is provided by the US imports of crude oil from Mexico. Oil is not a homogenous product and the heavy grade crude that the US imports cannot be substituted by shale oil. US refineries imported some $15 bill worth of Mexican heavy grade crude in 2018. Alternative supplies of similar crude are limited because Venezuela is restricted by its own sanctions, Canada has specific pipeline problems and Saudi Arabia is limiting its production according to current OPEC quotas.
So if tariffs are applied to Mexican oil imports that are required by the US refineries, who is going to pay the tariffs: the Mexican producer, the US refinery or the US consumer?
Another interesting story concerns the US shale companies. Several reports are showing that, whilst production is breaking new records, the bulk of the drilling companies are still not producing a positive cash flow and that there is growing difficulty in finding continuing supplies of capital to finance their operations.
According to one report over 170 U.S. shale companies have declared bankruptcy since 2015, affecting nearly $100 billion in debt, and there have been an estimated 8 bankruptcies already this year, with some $3 billion in debt restructured.
With capital markets increasingly shunning shale drillers there is a stark warning in the comment from IEEFA and the Sightline Institute that: “Until fracking companies can demonstrate that they can produce cash as well as hydrocarbons, cautious investors would be wise to view the fracking sector as a speculative enterprise with a weak outlook and an unproven business model.”
Are we seeing shale production reaching a plateau at these levels due to limited financing for additional drilling - but this issue has been around for some time and, like the US eternally increasing national debt, never seems to create a problem!
All a bit messy…
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Additional boost to oil prices follows comments from the Saudi Arabian oil minister that it is almost certain that OPEC+ group will be extending the oil production cuts at their meeting later this month. Although Russia and OPEC have varying targets for oil prices, they appear to be aligned in intention. I.e. it is not a question of whether there is an extension, rather a question of how much and for how long and how much per group member.
Maybe I am just a little suspicious nowadays, but I can’t help wondering why such reassurances are being given so soon before the meeting. Often the outcome is not clear until after the meeting itself. Can it be that the OPEC+ members are also greatly concerned about the threat from shrinking global growth rates and are taking any opportunity to talk up prices in order to soften market reaction to gloomy news in the pipeline…
As long as they keep commenting I’m good!!! LOL!!!
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NFP came in with a much lower job creation number than expected and lower rise in wages. This is not likely to add a great boost to prices today - unless someone comes out and says something!!
Looking at the clean hourly chart for this week, we haven’t actually achieved anything and have remained very close to last week’s low around $53 which was touched last thing last Friday!
Yesterday’s rise was only a quick “correction” to the earlier drop and we are again stalled at this levell. The Weekly 200SMA is just below here at 52.46, Will we close above or below it? Either way, this week in oil has not given any directional clue concerning where we go from here. My Daily /4H/1H charts are all bearish/neutral in flavour.
Yeh. And isn’t it funny. All these dudes that argue about trading news. Well NEWS FLASH: in spite of that the S&P Futures is still on a tear upward (ask me how I know!!! LOL!!!). OIL, as you have seen, on the other hand is tanking again. I have a rotten feeling I’m going to see that ADX “not uncommon for it to rise at the blow off stage” scenario play out. Problem is that could be here, at $50, or at the bottom!!! And here I was thinking I’d be ordering a nice curry tonight!!! LOL!!!
Actually, I wouldn’t say it is tanking. In fact, I am rather surprised how muted the response has been so far, given the news. I am kind of anticipating a turn around later and a positive close on the day - but that is just gut feeling with a dose of the traditional rule that “what doesn’t go down when it should will for sure go up though it shouldn’t” 
Anything that takes me from a reasonable profit to a reasonable loss is tanking in my book!!! LOL!!!
Be nice if you’re right though i.e. have had these positions open for a good while now. Alright. Maybe not (just checked i.e.03/06). Still. They’ve both moved in an out of some (relatively speaking of course) nice profits just about every other day.
It’s actually crazy. But we’ve discussed this already have we not. But I think I should no longer use the words "sane’ and “logic” here but rather the word “experience”. Point being: “sane” and “logic” would look at those numbers and think “oh no, not good, stocks down”. “Experience” on the other hand says “oh no, not good, Fed will therefore drop interest rates”. And therein lies the difference.
Problem is: it takes “experience” a while to kick in and by the time that’s happened the trade is over or you’re on the wrong side. Took me about fifteen minute to figure the above out!!! LOL!!!
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Yep, doesn’t always work but experience and gut feel can help avoid some bad situations - that is why I hate to become “bonded” to a set of rules. But it can also earn some pips, too. Even though it has been a drab directionless week, there have been pips to be earned - and even today. Although, I am conservative today being Friday and charts a little negative still - so 30 pips is good and in the “bank”. That is me done for the week:
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Thought I would jump into the thread after reading dales thread on the system he is using and Manxx’s discussions as well. I have never looked at oil only forex. I am strictly technical (If I sound like I know what I am talking about don’t be fooled!
)
Took a look at the chart and here’s my take…
I set limit orders: 3-.01, 1-.02, 1-.03 beyond demand zone (.03 isn’t showing up on screen grab). If the .01s are hit but the price looks like it’s continuing down will cancel remaining limit orders.
USOUSD_Daily 060719
Dale, this will look familiar to you!! Sorry for the cherry picking in your thread! Breaking my own rules again!!
KC
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Hi @frandlost!!! and welcome to the oily rag club! 
Are you doing this on demo?
I have to give you a very stern warning here! Trading oil is highly addictive and you may find that if you start earning here then there will be no returning to forex! 
I won’t comment on your levels, etc because it is not a method I personally use, I’ll leave that to the expert, Dale!
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Yes. I am still a demo dog!
Though I feel as if the the last few weeks have been great learning weeks.
Feel free to do so anyway! A different perspective always ways gives me another reason to examine my process and consider other options/strategies.
Looking forward to joining the conversation! Thanks for the welcome @anon46773462! I feel pretty “slick” already!!
KC
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We will cure you of the FOREX bug yet!!! LOL!!! Now you are thinking!!!
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