27 Oct Daily take on WTI crude oil
Daily take on WTI crude oil
This is my daily take on the WTI crude oil market. I will keep these post short and to the point. The purpose of these posts used to be to set me up with a bias for the day and look for signals to start taking positions. However, I learned that it doesn’t mean much. Especially the fundamentals don’t make much sense. When there’s an oversupply you’d think prices will go down, but it’s a 50/50 chance the way I see it at this point. So what do we do? Cry and give up? HELL NO! We adapt and adjust. Evolve as a trader. THe market is always right. So what does that mean for me? That means I will focus more on crucial parts of the technical analysis that gives me the levels I can play at when the market chooses to go in that direction. In addition to this… I will still track the fundamentals besides the technicals. I’ll just won’t draw any conclusions from it at this point. At a later stage I want to analyze these findings with what the market presented to me but I need to gather more information first. So let’s get on with it.
Graphical data is from www.investing.com and Metatrader 4.
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…
WTI has positive and negative correlations to other financial instruments and I will list these here to show the reason for my bias. I have three categories: Downward, neutral and upward pressure. Downward pressure means that the items listed have a negative effect on WTI crude oil and is cause for a short-bias and vice versa.
Related Financial Markets
On the daily chart looking a year back we can see that we are nearing the highs from the beginning of 2017.
We can see that the related ETFs are looking predominantly positive.
The positive correlated financial markets look bearish this morning. As always we’ll have to see what happens in the market.
The negative correlated ones look indecisive.
HOUSTON/RIO DE JANEIRO (Reuters) — Brazil and Mexico are competing for a diminishing resource: the investment dollars of oil majors beating a retreat from the big-ticket offshore projects they once coveted.
Governments throughout the continent are enacting reforms and changing contract terms to lure oil firms that have slashed spending as they adapt to lower crude prices. Global policy changes to address climate change have given an added sense of urgency to governments in the region and worldwide that are sitting on oil and gas reserves. They want to pump it before it becomes less valuable.
Low crude prices have made oil firms choose carefully where they invest, but they need the substantial reserves Brazil and Mexico are offering. The rate that energy companies replace the barrels they produce is a key metric for shareholders, and offshore blocks such as those in Mexico and Brazil come with billions of barrels in available reserves.
For many oil majors, the Mexican side of the Gulf offers a familiar geology: the formations below the seabed are similar to those they have drilled for decades in the nearby U.S. waters. But unlike Brazil, there has been no deepwater development in Mexico, so more infrastructure needs to be built.
UNITED NATIONS (Reuters) — The Syrian government of Bashar al-Assad is to blame for a chemical attack on the opposition-held town of Khan Sheikhoun that killed dozens of people last April, according to a report sent to the United Nations Security Council on Thursday.
Investing.com — Gold prices fell in Asia on Friday as the dollar showed continued gains and demand for safe-haven assets is on the wane for now.
Overnight, gold prices fell on Thursday after the dollar hit three-month highs following a slump in euro as the European Central Bank pared its bond purchases while extending its monetary stimulus programme for a period of nine-months.
Investing.com — Crude oil prices fell in Asia on Friday with the market cautious as OPEC member and major producer Venezuela reportedly faces problems making payments on bonds issued to the state oil company PDVSA and with U.S. rig count data ahead.
Payments on bonds issued by Petroleos de Venezuela SA, or PDVSA, and the Venezuelan government remain a question mark two days after the state-owned refiner and producer made good on two overdue bond payments and approved a $985 million debt payment due Friday.
Overnight, crude oil prices settled higher on Thursday as recent data showing an uptick in U.S. crude supplies and a surge in domestic production was offset by growing expectations that Opec will extend its global accord to cut output.
SEOUL (Reuters) — Oil prices inched higher on Friday, with Brent crude approaching $60 a barrel amid tightening market expectations, buoyed by comments from Saudi Arabia’s Crown Prince backing the extension of OPEC-led output cuts.
Oil prices have hovered near their highest for this year in recent weeks amid signs of a tightening market, talk of an extension of the cuts, and geopolitical risks in Iraq and Iran.
“Prices for both Brent and WTI are now approaching important recent range tops. My rhetorical self is bullish longer term and my system is already long,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
Yesterday I didn’t trade my plan. I was otherwise occupied and didn’t put in the focus to just trade my plan. I reverted to trying to hunt for the reversal which never came and now I have 4 short positions open that are at a loss. I think there will be a pullback coming so I’ll decide there and then how to manage my losses.
If we look at today’s 4‑hourly chart we can see that we broke through the resistance trend line. However, we did not take over the top we formed on 26th of September. This could indicate a pullback to the 52.60 level before heading further up. Or, we drop below that same level and make our way down for a while to settle in the market a bit. Not sure what that means but I make up things as I go along and it has helped me so far so I’m sticking with it 🙂
Let’s see how we are closing the week today.
Thank you as always for being a part of my journey into becoming a trader. Please feel free to comment or ask questions. Let me know what you think.