21 Sep Daily Analysis 9/21/2017
9/21/2017 Daily Analysis
So yesterday’s WTI crude oil futures trading was an interesting session. Before I get started on what trades I took and ask a bunch of questions like ‘How did they go? What could I have done better? What mindset was I in? How was I feeling?’. I think I should start off by pointing out that I am still learning and all these are merely my efforts to learn how to trade crude oil.
I’ll be making a lot of mistakes and I’ll be sharing all of them with you. Together with all the conclusions I draw from them. Hopefully, someone out there can learn from my mistakes. Not sure if there is anyone out there though. Is there anyone out there?! Doesn’t really matter does it? Learned a long time ago that looking for others to share your path with is just another passive aggressive tactic of self-sabotage.
Choosing a format
Because I am doing this blogging and writing a trading journal thing for the first time I’ll make a lot of mistakes. Change the format, etc. Which is OK. For now, the questions I asked about my trading will be the format I start off with. Good a start as any right?! 😉
Click here for my disclaimer. It basically says that I am on my path to becoming a trader and these are just my opinions on how to approach learning to trade. Feel free to check it out and comment on it.
Here it goes…
My analysis from yesterday was wrong. I concluded that prices could go up a little before dropping down. And that’s not what happened. Prices shot up. Way up. Luckily for me I cancelled my stop loss orders when I got the feeling prices would go against me. It’s funny if things work out fine we consider ourselves lucky or even genius. In fact it was stupid to have just ‘hoped’ for that to happen. My ‘gut’ did say that prices would go down because they have gone up for a while now. And ‘whatever goes up, must go down’. Also, prices had come close to a resistance trend line level and was over-extended from the 50SMA and 200SMA.
My lucky trades
I have no illusions that at this point I am just having trades go my way because of luck. Mostly. We’ll see in the end if I can keep getting these lucky breaks to a point where I can stop calling them that.
Bring on the charts
At a glance on the 4H
Yet again after the release of the EIA report, prices rallied up to retest the 50.75 level. It even went beyond it for a while and then dropped below. The candle where the most volatility happened formed a very neutral doji candlestick indicating a lot of indecision at that level. However, afterwards prices have gone down a bit to for a support level at 50.65. It looks like prices have tested the resistance trendline again and it is still losing momentum and wants to reverse. Of course only time will tell. Let’s have a look at what happened with the moving averages.
On the 4 hourly chart we can see that price action nicely followed the 20SMA from the BBs. Prices stayed in the upper part of the BBs indicating an uptrend at the moment. Price are closer to the upper band though which could mean that prices would go down to reach the 20SMA at about 50.45 dollars. The 50SMA went up on a steep angle and prices are still pretty far from it. Does this mean they’re over-extended? I hope so. If you’d extend the 20 and 50SMA into the future, they do look like they’ll meet in the near future. They look like they could meet around the 50.45 level as well. Is this some kind of omen that this might be the new support level? Or a simple mathematical formula? Magic probably. Let’s dive in deeper shall we.
At a glance on the 1H
On the hourly chart we can see that there was a big struggle between the bulls and the bears. We see a long upper wick candle indicating bulls were on the attack but the bears knocked them down. Then the bears tried to take over and push prices down but the bulls weren’t having it so prices stayed in limbo between 50.60 and 50.70. As I am writing this. I can see that prices are trying to push further down which would confirm my earlier sentiment. Let’s see if it will be a significant drop. Go BEARS!
The 20SMA BBs show that prices are at the midway point but haven’t broken it yet. We’re going to need some more power on the Bear’s side to push this down. Price are3 at the midway point so they could go back up to the upper band if they don’t break down. The 50SMA has been a good point of support so let’s wait and see if it will attract prices again. The 200SMA is still far on the horizon but could creep up if this stay bullish to form a harder support area higher in the 52 week range.
At a glance on the 15M
Here we can see that prices are trying to break to the downside. That red diagonal line is a trendline that has supported prices above it. As we can see prices have ducked underneath so it might be a good sign. History has taught us that looks can be deceiving. It’s all about the waiting game. Let’s see what happens.
Prices have gone under the 20SMA as well as the 50SMA. Getting pretty close to the 200SMA. Although, it seems to be supporting prices really well and repelling it. Hopefully we can duck underneath the 200SMA and start a bear run for the next week before we go back up. It’s about time the market took a breather and loosened up. Prices are also hugging the lower BB and are bouncing between the lower BB and 20SMA. Let’s see if we can pick up momentum and keep this going.
There are good signs that price are looking for a momentary reversal to initiate the pullback even more after such a steep rally. There were some moments where people were taking profits from their long positions that made prices duck a little but I feel we are due for a bigger bearish move even though probably very short-lived.