Trade ideas, analysis and low risk set ups for commodities, Bitcoin, gold, silver, coffee, the indexes, options and your retirement. We'll help you keep your emotions out of your trading.
Crude oil fell after a government report showed a larger than forecast gain in stockpiles as sinking demand pushed refinery operating rates to the lowest level in more than a year. Supplies of crude oil rose 1.76 million barrels to 337.7 million last week, the Energy Department report showed. Analysts surveyed by Bloomberg News forecast a 1 million barrel gain. Refinery operations declined to the lowest level since September 2008, when units were shut in the aftermath of hurricanes Gustav and Ike.
“The big problem is that demand is week, and refiners are starting to feel pain,” said Carl Larry, president of Oil Outlooks & Opinions LLC, a Houston based energy adviser. “It’s good for consumers that crude oil stocks increased, but with demand so low, refiners aren’t going to need it to make gasoline and other fuels.” Crude oil for December delivery fell $2.14, or 2.7 percent, to $77.14 a barrel at 11:59 a.m. on the New York Mercantile Exchange. Prices are up 73 percent this year. Futures traded at $77.32 before the report’s release at 11 a.m. in Washington.....Read the entire article.
Crude oil has a nice bull flag and we are waiting for a breakout and setup while natural gas continues to see selling pressure.
USO Fund Trading – Daily Fund Chart The USO oil fund broke out a few weeks ago from the large pennant pattern. The price has been flagging for about 3 weeks now. It looks like we are getting close to a low risk setup so I am keeping a close eye on this fund.
UNG Fund Trading – Daily Fund Chart Natural gas continues to under perform the rest of our commodities. This fund is starting to look like another good by point but we need a few things to fall into place before that happens. Let’s not jump the gun because this fund is still in a bear market. Waiting for a setup.
Waiting for these exchange traded funds to generate low risk setups and watching our current positions mature is the boring part of trading. It’s these slow times when traders get bored and start taking more risk by entering positions that do not have clear entry and exit points. Not having clear entry and exit points will lead to traders holding on to losing trades and not taking profits on winning trades. Be sure you enter positions which you know where you should get out if the trade goes against you and where to take some money off the table if it rallies higher.
ETF Trading Conclusion: We continue to wait for trading opportunities to unfold. We focus on taking advantage of low risk setups and avoiding times the market when things are choppy and unclear.
Crude oil rose as Chinese crude imports neared a record and the dollar weakened to a 15 month low, buoying demand for commodities. China’s net oil imports were almost 19 million tons, or 4.5 million barrels a day, the second highest level ever, according to data from the Beijing based customs office. Oil rose and gold surged to a record as the dollar’s slide bolstered purchases of raw materials by investors seeking alternative investments. “The Chinese numbers are obviously very supportive,” said John Kilduff, partner at Round Earth Capital, a hedge fund that focuses on food and energy commodity investments, in New York.
“The consistently high import numbers fly in the face of those who say there is nothing fundamental about the rise in oil prices.” Oil for December delivery rose 82 cents, or 1 percent, to $79.87 a barrel at 10:01 a.m. on the New York Mercantile Exchange. Futures have climbed 79 percent this year. Chinese imports increased as industrial production soared 16 percent from a year earlier, spurring fuel use. Last month’s net imports were the highest since July’s record 19.2 million barrels. China is the second largest oil consumer after the U.S.....Read the entire article.
After hitting our first upside target of $1,110 two days ago, gold prices backed off but still managed to close at their best levels today for a new record high close in New York basis the spot gold.
The main trend continues to be positive and we believe that any pullback in this market should be met with good support. It is possible that we could see a pullback of $20-$25 which would not change the overall positive trend of the market which we see continuing until the end of the year.
As readers of this blog know, we have an upside target zone of $1,250-$1,300 an ounce for gold. While that target zone is still in place, we believe that the huge “energy field” that we’ve discussed in our earlier gold videos is capable of pushing this market higher.
In this new video we explain some of the areas that we are looking at and also some of the places where you can place tight stops to lock in profits.
Just Click Here to watch the video and as always the videos are free to watch and there is no need to register. We would love to hear your views on gold in our so please feel free to leave a comment.
After surging yesterday on the weak dollar and now tropical storm Ida, I think we can focus on all the bearish stuff that did not seem to matter. You know stuff like gas gluts and supply surpluses. As Ida hits the coast the market realizes that there is plenty of oil, products and spare production capacity to easily weather this tropical storm. More oil is on the way as the Saudis and OPEC send signals that more oil production is likely at the December OPEC meeting and news that China is raising the domestic cost of gasoline which could put a dent in China’s domestic oil demand.
Reuters News reported that Saudi Arabia, the world's top oil exporter, has increased December supplies to large companies, and one Asian customer is expected to receive full contract volume. Bloomberg News reported that OPEC is increasing output at the fastest pace in two years, adding to near record inventories. This is raising speculation that this is a precursor to OPEC oil increase at the December OPEC meeting. Yet Dow Jones reports that.....Read the entire article.
Crude oil fluctuated as Tropical Depression Ida weakened and the dollar gained against the currencies of major U.S. trading partners. Ida’s sustained winds have dropped to 35 miles (56 kilometers) per hour from 45 mph earlier, the National Hurricane Center said on its Web site. Producers have begun preparations to resume operations. A stronger dollar reduces the appeal of commodities to investors looking for an inflation hedge.
“I doubt there was any severe damage caused by Ida,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “There will probably be some impact on next week’s inventory data, but that’s it.” Crude oil for December delivery fell 32 cents, or 0.4 percent, to $79.11 a barrel at 11:36 a.m. on the New York Mercantile Exchange. Futures dropped as much as 88 cents and climbed as much as $1.08 today. Prices have increased 77 percent this year.....Read the entire article.
The Dow jumped to new highs for the year, extending its gains from the lows seen in March.
What does this mean for the future?
The Dow is now within 100 points of being into thin air as it has retraced close to 50% of its down move. The NASDAQ has already done this, and the S&P 500 has come very close to achieving this goal. Clearly the trend continues to be positive for the Dow with today’s new highs. The other two indices, while closing very well and on an upbeat note, must clear their previous highs to start another push to the upside. It remains to be seen whether or not that will take place.
Clearly this is an emotional market that’s been driven more by sentiment then hard economic news.
Having said that, one must take into consideration the perception of the marketplace, and as of right now that perception continues to be friendly towards the long side of these markets.
In our new video we show you some of the key points to look at in terms of where these markets could potentially break down, and possibly reverse to the downside.
Just Click Here to watch the video, and as always please feel free to leave a comment and let us know where you think the Dow is headed.
What are the questions that educated investors ask in oil and gas?
Last month I gave investors 10 questions they should be asking management teams, or searching for on the company website, in a recent article. They were basic questions, and you can read them here. After those first 10 are answered, you know how much production a company has, how fast they’re growing, how much cash or debt they have etc. But if you’re still not sure if you want to invest in the company after all that, or just want to know more…what are the right questions to ask? What pitfalls or opportunities might an investor uncover?
1. Decline rates are something management teams don’t really hide, but don’t really talk about either. Every well has declining production until it’s uneconomic. The new shale gas plays often have 85% decline in production in the first year. Tight oil plays (Bakken, Lower Shaunavon etc) have 75% initial decline rates. Decline rates are increasing over time now as the industry drills deeper and tighter plays. Ask management what the initial decline rate is, both company wide, and specifically on their main, big play that they believe will be the growth engine of the company. Then ask what the decline rate flattens out to it’s usually 20-30%.
Why is this important? Because many investors, when forecasting growth, use the only public numbers given for a well – the ones in the press release. Most companies have a production decline graph in their powerpoint, but few actually say what the production levels in the wells in the area flatten out at.....Read the entire article.
Crude oil rose as a falling dollar bolstered investor demand for commodities and Tropical Storm Ida entered the Gulf of Mexico, forcing BP Plc and Chevron Corp. to cut output. Oil climbed more than $2 after the greenback fell against a basket of six major currencies following a decision by the Group of 20 governments to maintain economic stimulus measures. Workers were evacuated in the region, an area that accounts for 27 percent of U.S. crude production and 15 percent of natural gas output. “The G-20 didn’t comment about the dollar, which indicates that no action will be taken, and the greenback will further deteriorate,” said Michael Fitzpatrick, vice president of energy with MF Global in New York. “A weak dollar translates into higher oil prices.”
Crude oil for December delivery rose $2.01, or 2.6 percent, to $79.44 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Prices rose as much as 3.6 percent to $80.19, the biggest gain since Sept. 30. Oil is up 78 percent this year. Prices dropped $2.19, or 2.8 percent, to $77.43 on Nov. 6, the lowest settlement since Oct. 30, after a report showed unemployment in the U.S., the world’s biggest energy consuming country, climbed to 10.2 percent, the highest in 26 years......Read the entire post.
I think it is because they try to apply a long term strategy to a short term time frame. Once they get on the right side of the trade, they have the illusion that they are going to ride that trade for 60, 80, or 100 pips. Most of the time they get a price reversal, stopped out or scared into a losing trade. There are a few exceptions when you can ride price like that, but normally you can not, so let's deal with the everyday market.
If you are going to be a long term successful day trader; it is imperative that you understand that you are not going to ride a 5min set-up into everlasting pip glory. On a short term trade set-up like your 5 chart, look to get in after a confirmation in the direction of the trend, then get out quickly.
After a confirmation, you can usually get out with about 5-10 pips, before price begins to retrace(in the candles) on you or it begins to trade sideways. I think your 15 min chart is a better chart to trade from as a short term trader. Be sure to trade in harmony with the trend.
In the morning, draw a short term trendline on your chart. Be sure to also check to see what the trend is on your daily chart. I generally check my hourly, 4 hour and daily, just to see. If I have an evening star pattern on my hourly chart, then I am not going to take a trade to the long side on my 5 min chart. You have a much stronger chance of quick profit if all or most of your charts agree. You will have the opportunity to go short or long on your 5min chart, but your most successful and profitable trades are going to come when you trade in harmony with your trend.
Keep in mind that your trend is likely to CHANGE or take a BIG DIP or a HUGE SPIKE, so watch your candles for that.
I know traders who get 200 or more pips many days. I can tell you I don't even close to net those kind of pips on an average day. I usually set my TP level for 5-7pips on my 5 min chart and 10-12 on my 15 min chart. I use my small trades to build up my accounts, and I use my larger trade set-ups for my profit rides. My smaller trades during the day give me that extra SL money I need to facilitate my longer term trading, so if I am stopped out, then it doesn't hurt nearly as bad.
(K.I.S.S), Keep it simple sexy. Trading is not physics, it is just a bit tricky until you get use to the way price moves.
I am an equal opportunist and trade all time frames, and I can tell you from experience that a valid set-up on a larger time frame is going to give you more accurate and profitable rides. The downside to longer term trading is that you have to wait longer for those trade set-ups. The downside to day trading is that your profit run isn't as long and the trend within a trend can get confusing, and you must be very good at getting in and getting out quickly. The benefit of course is that you get more trading opportunities and you don't wait as long for valid set-ups.
Short term trades - GET IN, GET OUT!!!!!! Longer term trades - sit back and enjoy the ride!
Learn your candlestick patterns and always let price be your first indicator. Only take trades with proper confirmations.
