Crude Oil Trades

The NYMEX crude oil contract got close to $100 ($100.19) but stayed above the magic number for today. I hope the overnight trade doesn't take it below $100 because I want to be there if it happens.

Today's trading was ok with a winner, full stop, and a couple of break evens. Money management as always is the key. I can have a good day with 1 winning trade by limiting the losers quickly.

There is no free lunch as that same money management means I miss some moves due to tight stops and moving my stop to break even.

The second and third trades on the chart are examples of that.

You can't get everything. Or at least I can't.

13 Tick Crude Oil Renko Bar Chart (click on chart to view)

Crude Oil Heading Down to $........

Not much happening for me in the trading yesterday, the signals had initial movement but then retraced for break even stops.

The daily chart has an interesting look with the 144EMA breached, than a double retouch of the 144, and then today a new lower low.

This could make for an entertaining ride next week.

If you swing trade this is interesting, if you day trade it is not interesting, if you don't trade at all you're just confused.

Crude Oil Daily Chart (click on chart to view)

Oil is Down, Oil is Up

The Asian and European trade had crude oil trading down to $126, and then the American trade moved it back up to $131.

There seems to be some "fear" in the market that the bull oil run may be close to over. Then the commodity bulls state that the run has just started.

RBC Capital Markets was comparing the oil run to the tech bubble that ended in 2000. That seems like an odd comparison to me as there is one significant difference in these two markets.

Companies can keeps issuing stock forever, oil is finite. So the old "it’s different this time" axiom may have a chance of holding true this time.

The bottom line for crude in the long term is not going to be determined by speculators, it will ultimately be priced based on supply and demand.

Price will eventually limit demand, and if demand falls enough for oil inventories to rise dramatically the price will fall.

I think.

The trading today was difficult as the price action was nervous. Meaning, price was jumping multiple ticks at a time and required either a large stop or a lot of patience.

I prefer patience rather than large stops.

It takes some experience to not get mesmerized by your technical indicators and take all the signals no matter what.

If price is jumping all over the DOM and just does not look like "normal" price action you are probably better off to stay out of the market.

Oil is Down (click on chart to view)

Oil is Up