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)

Trading Like Robert the Bruce

An Irish trader told me the story of Robert the Bruce and the Spider today. I was plugging along and not getting much for my efforts so the Irish trader thought this would keep me going.

Bruce and the Spider
(Scotland)
HUNDREDS of years ago there was a king of Scotland and his name was Robert the Bruce. It was a good thing that he was both brave and wise, because the times in which he lived were wild and dangerous. The King of England was at war with him, and had led a great army into Scotland to drive him out of the land and to make Scotland a part of England.

Battle after battle he had fought with England. Six times Robert the Bruce had led his brave little army against his foes. Six times his men had been beaten, until finally they were driven into flight. At last the army of Scotland was entirely scattered, and the king was forced to hide in the woods and in lonely places among the mountains.

One rainy day, Robert the Bruce lay in a cave, listening to the rainfall outside the cave entrance. He was tired and felt sick at heart, ready to give up all hope. It seemed to him that there was no use for him to try to do anything more.

As he lay thinking, he noticed a spider over his head, getting ready to weave her web. He watched her as she worked slowly and with great care. Six times she tried to throw her thread from one edge of the cave wall to another. Six times her thread fell short.

"Poor thing!" said Robert the Bruce. "You, too, know what it's like to fail six times in a row."

But the spider did not lose hope. With still more care, she made ready to try for a seventh time. Robert the Bruce almost forgot his own troubles as he watched, fascinated. She swung herself out upon the slender line. Would she fail again? No! The thread was carried safely to the cave wall, and fastened there.

"Yes!" cried Bruce, "I, too, will try a seventh time!"

So he arose and called his men together. He told them of his plans, and sent them out with hopeful messages to cheer the discouraged people. Soon there was an army of brave men around him. A seventh battle was fought, and this time the King of England was forced to retreat back to his own country.

It wasn't long before England recognized Scotland as an independent country with Robert the Bruce as its rightful king.

And to this very day, the victory and independence of Scotland is traced to a spider who kept trying again and again to spin her web in a cave and inspired the king of Scotland, Robert the Bruce.

13 Tick Renko Crude Oil Chart (click to view)

Goldman, Morgan Stanley Among Dubai Merc Investors

There is a good book, Rigged, by Ben Mezrich, about the start of the Dubai Merc. It's also a entertaining look at the traders on the NYMEX.

"Goldman Sachs Group Inc., Morgan Stanley and four energy-related companies are taking minority stakes in Dubai Mercantile Exchange Ltd., adding clout to the fledgling exchange as it seeks to establish itself as a major player in the global crude oil market." (AP)

Click on the read more icon for the full CBS News story.


read more | digg story

Crude Oil Barrel Count

EIA Petroleum Status Report

The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S., whether produced here or abroad. The level of inventories helps determine prices for petroleum products.

Released on 8/13/08 For wk 8/8 2008
Crude oil inventories (weekly change)
Actual -0.4M barrels
Previous 1.7 M barrels

Highlights
Gasoline stocks plunged 6.4 million barrels in the Aug. 8 week to 202.8 million, a drawdown that tripped an immediate rise in oil prices. Stocks of crude oil slipped 0.4 million barrels to 296.5 million with distillate stocks making it a clean sweep, down 1.7 million barrels to 131.6 million. Refineries, operating at a very mild 85.9 percent of capacity, are cutting back on production as oil and pump prices fall. Gasoline production in fact declined in the week though supply is still 0.1 percent higher than a year ago. Despite the cut in production, gasoline supply continues to exceed demand which is down 1.9 percent on the year. Jet fuel demand is much lower, down 8.5 percent year-on-year. Oil prices may rally in reaction to this report but the long term outlook for slowing economic growth is likely to overshadow weekly changes in inventories.

Trends
As is evident from the chart, crude oil stocks can fluctuate dramatically over the year. When oil prices nearly reached $50 per barrel in August 2004, financial market players began to monitor crude oil inventories. It is not surprising to see sharp price hikes in crude oil when inventories are falling. Conversely, one would expect price declines when inventories are rising.


Data Source: Haver Analytics | Consensus Data Source: Market News International and Thomson Financial

Crude Oil Blues

Today's the day for funky music videos on Trading Crude Oil.

Trading the Plan, Even if it Hurts

Only 2 signals today, which is a good thing as I would rather trade less than more.

Both signals were clear, both signals had nice follow through, and I lost money on both signals.

The 12 tick stops were not wide enough to keep me in and I do not try and re enter until that move is over. In other words I have to wait for a new signal. This rule is in place to keep me out of my revenge trading mode.

That's they way it is with trading, sometimes it's all there and you don't get anything but pain. Which is why people change their plan over and over. I will just show up for work tomorrow and do the same thing.

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