12162018 Weekly Big Picture

16 Dec 12162018 Weekly Big Picture

12162018 Week­ly Big Picture

This is part of my week­ly prepa­ra­tion of my trad­ing week to give me an idea on where I think the mar­ket stands. 

Ter­mi­nol­o­gy (par­tial­ly made up by yours truly)

• PA = Price Action
• BO = Break Out
• BD = Break Down
• CAR = Con­firm As Resistance
• CAS = Con­firm As Support
• UKC = Upper Kelt­ner Channel
• LKC = Low­er Kelt­ner Channel
• TV = Tick Volume
• WPP = Week­ly Piv­ot Point
• DPP = Dai­ly Piv­ot Point
• DR = Dai­ly Resis­tance (piv­ot)
• DS = Dai­ly Sup­port (piv­ot)
• WR = Week­ly Resis­tance (piv­ot)
• WS = Week­ly Sup­port (piv­ot)
• HL = High­er Low
• HH = High­er High
• LH = Low­er High
• LL = Low­er Low
• SD = Stan­dard Deviation
• VWAP = Vol­ume Weight­ed Aver­age Price
• AS = Asian Session
• LS = Lon­don Ses­sion (EU)
• NY = New York Ses­sion (US)

The Big Picture

• WTI
  • What hap­pened last week?
    • The mar­ket seems to be unim­pressed with the oil pro­duc­tion cuts made by OPEC+
      • How­ev­er there are oth­er fac­tors at play as well
        • Oil rig count decreased by 4 in the US
        • Libya biggest oil field Sharara (which pro­duces 300.000bpd) tak­en by militants
    • Last week we basi­cal­ly con­tin­ued the range how­ev­er con­sol­i­dat­ing between the 50.80 and 53 levels
  • What is the sup­ply and demand balance?
    • The mar­ket seems to think that more needs to hap­pen before it’s con­vinced that the glut is over. Hence the rang­ing for the last 1.5 week
  • What is the mar­ket sentiment?
    • What does Retail Sen­ti­ment state?
      • Retail sen­ti­ment accord­ing to IG has been very bullish
    • What does investing.com state?
      • What does investing.com state?
        • Last week’s sen­ti­ment numbers
          • All sen­ti­ments is 58% bullish
          • Last week 63% bullish
          • Last 3 days 61% bullish
        • This week’s
          • All sen­ti­ments is 60% bullish
          • Last week 66% bullish
          • Last 3 days 65% bullish
        • Accord­ing to investing.com we increased in bull­ish sen­ti­ment, 2 points in all sen­ti­ment, 3 points last week and 4 points in the last 3 days
          • Over­all bull­ish sen­ti­ment seems to be increas­ing but keep in mind that this is on the retail level
  • What was in the reports?
    • The API report­ed a draw of ‑10.180M
    • The EIA report­ed a fore­cast of ‑2.990M but the ‘actu­al’ num­ber was ‑1.208M
      • Both can be con­sid­ered bear­ish since the draw was well less than expected
  • What is the Tick Vol­ume showing?
    • I just real­ized that the plat­form I was using to col­lect the tick vol­ume data and the plat­form I use for the actu­al trad­ing have a gap in prices. There­fore these num­bers under­neath, besides the Fri­day and last week data are inac­cu­rate. I did change the tick vol­ume to the right num­bers used by my trad­ing platform.

• What are the most impor­tant tech­ni­cal lev­els in the market?
  • Piv­ot lev­els and Tick Volume
    • Tick vol­ume has been some­what con­sis­tent although we have declined com­pared to pri­or week. This could mean that we are more in uni­son or that there are less mar­ket par­tic­i­pants. I believe it’s the lat­ter since we are still try­ing to decide where to go from here.
    • Piv­ot lev­els show that we inched low­er when com­pared to last week
      • Also we had a small­er swing com­pared to pri­or week, we dropped from 448 to 292 ticks intraweek
      • We have entered a squeeze on the high­er time frame as well
        • We can see that Friday’s DPP and the WPP are very near to each oth­er that’s the dif­fer­ence is almost insignificant
  • Dai­ly chart
    • We made an attempt on Thurs­day to break the Dai­ly VWAP mean but final­ly dropped again Friday
    • How­ev­er we are inch­ing high­er a bit and consolidating
    • Key lev­els are
      • Resis­tance
        • 55 lev­el
      • Sup­port
        • 49.50
  • 4H chart
    • We are still ‘hug­ging the 50MA and are basi­cal­ly flat
    • Fur­ther­more we are still ‘miles’ away from cross­ing the 200MA
    • Resis­tance
      • 52.75
      • 54
    • Sup­port
      • 50.80
      • 49.50
  • 30M chart
    • Here we can see that we are below the DPP 51.868 and WPP 51.816
      • We are about 40 ticks below these levels
    • We are about 90 ticks above the DS1 50.590 level
    • Sup­port areas
      • 51.25
  • How far is the mar­ket from impor­tant tech­ni­cal levels?

• Is the mar­ket trend­ing up or down?
  • We haven’t bro­ken the range yet
• Is there an OPEC meeting?
  • There is no OPEC meet­ing planned. The next offi­cial meet­ing is in April.
• Ener­gy sector
  • How is the sec­tor as a whole doing?
    • US
      • 1 month
        • -8.25%
      • 3 months
        • -18.55%
      • YTD
        • -16.21%
      • The US sec­tor dropped even fur­ther and would need the mar­ket to first jump high­er before the whole sec­tor follows
        • We dropped YTD 3.5 points and 3 month 5 points. How­ev­er in the last month we had a bit of a breather and went from ‑10.45% to ‑8.25% so there might be change coming
    • The Amer­i­c­as
      • 1 month
        • -8.03%
      • 3 months
        • -17.35%
      • YTD
        • -16.91%
      • In the last month the Amer­i­c­as ener­gy sec­tor has relaxed a bit as well and went from ‑10.19% to ‑8.03%
        • 3 months dropped 3.5 points and YTD dropped 3 more points
    • Europe
      • 1 month
        • -3.88%
      • 3 months
        • -9.70%
      • YTD
        • -5.24%
      • In the last month we went from ‑6.85% to ‑3.88% (increase of 3 points) so some relief is there as well
        • 3 months we dropped a bit more about 4.5 points and YTD we dropped less than 2%
    • Asia
      • 1 month
        • -4.61%
      • 3 months
        • -14.07%
      • YTD
        • -10.01%
      • Fol­low­ing suit is the Asian sec­tor with a 2 point relief last 1 month
        • 3 months dropped 4 points more and YTD dropped 1.5 points
    • Mid­dle East / Africa
      • 1 month
        • -7.09%
      • 3 months
        • -5.87%
      • YTD
        • -5.41%
      • Relief of almost 4.5 points in the last month
        • 3 months almost stayed the same with a drop of only 0.5 points 
        • YTD had some relief as well and we gained almost 2 points
• EURUSD
  • What is last week’s price range?
    • Low 1.12712
    • High 1.14426
    • Close 1.13027
  • What is the mar­ket sentiment?
    • Accord­ing to IG
      • EURUSD: Retail trad­er data shows 58.1% of traders are net-long with the ratio of traders long to short at 1.39 to 1. In fact, traders have remained net-long since Nov 23 when EURUSD trad­ed near 1.1388; price has moved 0.2% low­er since then. The num­ber of traders net-long is 4.5% high­er than yes­ter­day and 10.1% low­er from last week, while the num­ber of traders net-short is 12.7% low­er than yes­ter­day and 8.7% low­er from last week.
      • MIXED BIAS
        • We typ­i­cal­ly take a con­trar­i­an view to crowd sen­ti­ment, and the fact traders are net-long sug­gests EURUSD prices may con­tin­ue to fall. Posi­tion­ing is more net-long than yes­ter­day but less net-long from last week. The com­bi­na­tion of cur­rent sen­ti­ment and recent changes gives us a fur­ther mixed EURUSD trad­ing bias.
• Gold
  • What is last week’s price range?
    • Low 1233.46
    • High 1250.82
    • Close 1238.58
  • What is the mar­ket sentiment?
    • Accord­ing to IG
      • Spot Gold: Retail trad­er data shows 77.7% of traders are net-long with the ratio of traders long to short at 3.49 to 1. The num­ber of traders net-long is 0.7% high­er than yes­ter­day and 5.5% high­er from last week, while the num­ber of traders net-short is 5.2% low­er than yes­ter­day and 3.1% low­er from last week.
      • BEARISH BIAS
        • We typ­i­cal­ly take a con­trar­i­an view to crowd sen­ti­ment, and the fact traders are net-long sug­gests Spot Gold prices may con­tin­ue to fall. Traders are fur­ther net-long than yes­ter­day and last week, and the com­bi­na­tion of cur­rent sen­ti­ment and recent changes gives us a stronger Spot Gold-bear­ish con­trar­i­an trad­ing bias.
• Geopol­i­tics
  • What are the main dri­vers in geopolitics?
    • Gold Falls Again as Dol­lar Hits 19-Month Highs on Chi­na Scare
      • Investing.com — It had to be one safe-haven or the oth­er and the dol­lar tri­umphed at the expense of gold on Fri­day as signs of slow­ing growth in Chi­na sparked risk aver­sion across the globe.
    • Cli­mate change: COP24 deal to bring Paris pact to life
      • Nego­tia­tors in Poland have final­ly secured agree­ment on a range of mea­sures that will make the Paris cli­mate pact oper­a­tional in 2020.
    • OPEC has shown it can reach deal despite splits: Iran oil minister
    • Chi­na Refiner­ies Process Less Oil As Fuel Prices Decline
      • Chi­nese refin­ery runs stood at 12.28 mil­lion bpd last month, high­er than the same time last year but low­er than the pre­vi­ous month and the month before, when runs reached an all-time high of 12.49 mil­lion bpd, Reuters reports, cit­ing Chi­nese sta­tis­tics data.
    • Chi­nese-Venezue­lan Joint Ven­ture Dou­bles Oil Production
      • A joint ven­ture between trou­bled Venezue­lan state oil com­pa­ny PDVSA and China’s CNPC in the South Amer­i­can coun­try has dou­bled its oil pro­duc­tion in the past sev­en months, Reuters report­ed today, quot­ing a unit of PDVSA, CVP.
      • The joint ven­ture, Sinoven­sa, accounts for about a tenth of Venezuela’s oil pro­duc­tion, which has been falling inex­orably over the past few years under the triple bur­den of the oil price col­lapse, years of mis­man­age­ment and cor­rup­tion, and U.S. sanctions.
    • Rus­sia Oil Exports Down 36.65M Bar­rels In First 10 Months
    • Stocks — U.S. Futures Fall Amid Fears of Slow­ing Glob­al Growth
      • in Chi­na post­ed their weak­est growth in 15 years, increas­ing wor­ry about the world’s sec­ond largest econ­o­my as the coun­try is impact­ed by trade dis­putes with the U.S. In Japan, the Bank of Japan’s Tankan sur­vey released overnight showed com­pa­nies expect con­di­tions to wors­en in the next three months.
    • Chi­na to halt added tar­iffs on U.S.-made cars in eas­ing of trade tensions
    • U.S. sets new March 2 date for Chi­na tar­iff increas­es amid talks
    • Chi­na should free Cana­di­ans held after Huawei arrest, U.S.‘s Pom­peo says
    • Mex­i­co tar­gets 50 per­cent jump in oil out­put under ‘Pemex rescue’
    • Chi­na’s Xi to address key reform anniver­sary on Tues­day: Xinhua
      • Xi will speak at a con­fer­ence to be held at the Great Hall of the Peo­ple from 10 a.m. (0200 GMT) on Tues­day, Xin­hua said on Sun­day. The report was in line with what diplo­mat­ic sources had pre­vi­ous­ly told Reuters.
    • U.S.-led coali­tion destroys Syr­i­an mosque used as ISIS com­mand center
    • Ukraine’s Pres­i­dent names leader of new church in split from Russia
      • KIEV (Reuters) — Ukraine chose the head of a new nation­al Ortho­dox church on Sat­ur­day, mark­ing an his­toric split from Rus­sia which its lead­ers see as vital to the coun­try’s secu­ri­ty and independence.
    • Thou­sands of French ‘yel­low vests’ protest for fifth Saturday
      • The ‘yel­low vest’ move­ment start­ed in mid-Novem­ber with protests at junc­tions and round­abouts against fuel tax increas­es, but quick­ly became a wider mobil­i­sa­tion against Macron’s eco­nom­ic policies.
    • At least 20 Afghan civil­ians killed in airstrike: officials
    • Zam­bia denies White House claim Chi­na tak­ing over pow­er utility
      • LUSAKA (Reuters) — Zam­bia has denied claims by a White House offi­cial that Chi­na is about to take over its state pow­er util­i­ty to recov­er $6–10 bil­lion debt, not­ing the util­i­ty was nev­er pro­vid­ed as col­lat­er­al and its debt to Bei­jing was only $3.1 billion.
    • Mal­dives police freeze bank accounts of ex-pres­i­dent Yameen as part of probe
      • MALE (Reuters) — Police in the Mal­dives said they have frozen the bank accounts of for­mer pres­i­dent Abdul­la Yameen as they inves­ti­gate alle­ga­tions by state bod­ies that he con­duct­ed “illic­it” deals, some involv­ing Chi­nese infra­struc­ture projects, whilst leader.
    • Europe must fight illib­er­al forces, Draghi warns
    • Aus­tralia rec­og­nizes West Jerusalem as Israel’s cap­i­tal but embassy not mov­ing yet
    • Chi­na pledges to help Afghanistan and Pak­istan bridge divisions
      • KABUL (Reuters) — Chi­na pledged to help Afghanistan and Pak­istan over­come long­stand­ing sus­pi­cions, as offi­cials from the three nations met on Sat­ur­day in the lat­est round of diplo­ma­cy aimed at open­ing talks with the Tal­iban to end the Afghan war.
    • Qatar says Gulf Arab bloc needs reform to give it teeth
      • DOHA (Reuters) — Qatar said on Sat­ur­day it remained com­mit­ted to the Gulf Coop­er­a­tion Coun­cil (GCC) but the bloc need­ed to enforce its own rules bet­ter, sig­nal­ing a reformed alliance could help end a row between Doha and some of its neighbors.
    • Turkey will keep attack­ing PKK in Iraq, for­eign min­istry says
      • ISTANBUL (Reuters) — Turkey will keep strik­ing Kur­dish PKK fight­ers in north­ern Iraq, the for­eign min­istry said on Sat­ur­day, a day after Bagh­dad for­mal­ly com­plained that repeat­ed Turk­ish air strikes vio­lat­ed its sov­er­eign­ty and endan­gered civilians.
    • One of Khashog­gi killers said ‘I know how to cut’ on audio, Erdo­gan says
    • Fight­ing breaks out in Yemen’s Hodei­dah after truce deal
      • The main port used to feed Yemen’s 30 mil­lion peo­ple is held by the Iran-aligned Houthi move­ment that also con­trols the cap­i­tal Sanaa and has been bat­tling against a Sau­di-led Arab coali­tion seek­ing to restore a gov­ern­ment oust­ed in 2014.

Feed­back?

Any ques­tions or feed­back you might have please feel free to leave a com­ment or con­tact me directly. 

Sources:

• https://www.investing.com/commodities/crude-oil-scoreboard
• https://bluegoldresearch.com/retail-sentiment-crude-oil
• https://www.investing.com/commodities/gold-scoreboard
• https://www.bloomberg.com/research/sectorandindustry/sectors/sectordetail.asp?region=US
• https://www.investing.com/commodities/crude-oil-scoreboard
• https://www.investing.com/economic-calendar/eia-crude-oil-inventories-75
• https://www.dailyfx.com/sentiment
• https://www.bloomberg.com/energy

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