30 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 that we are nearing the 52 wk high. We opened 26 cents higher than previous close. Let’s see where this all takes us.
We can see that the related ETFs are looking mostly positive.
The positive correlated financial markets look bullish this morning. As always we’ll have to see what happens in the market.
The negative correlated ones look like they might put upward pressure on crude oil prices.
SINGAPORE (Reuters) — Oil markets were stable on Monday, with Brent remaining above $60 per barrel supported by expectations that an OPEC-led production cut due to expire next March would be extended.
While OPEC and its partners are withholding supply, U.S. production has risen almost 13 percent since mid-2016. As a result WTI is trading at a steep discount of around $6.50 per barrel against Brent, which has made U.S. crude exports to the world attractive.
Hedge funds and other money managers raised their bullish wagers on U.S. crude futures and options in the week to October 24, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
“We note that both contracts’ (Brent and WTI) relative strength indices (RSI) are both approaching overbought levels. This may imply that crude has risen enough in the short term and some consolidation is required,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.
Investing.com — Gold prices gained in Asia on Monday with sentiment upbeat and the market well supported as recent dollar gains were taken in stride and demand cues in the physical markets were eyed ahead of end of the year holidays.
Investors will be focusing on Wednesday’s Fed meeting for fresh clues on the likely trajectory of monetary policy. Friday’s U.S. jobs report for October will also be closely watched.
Last week, gold prices rose on Friday, reversing earlier losses as the Catalonian parliament’s declaration of independence bolstered safe haven demand for the precious metal.
The dollar eased following a report that U.S. President Donald Trump is considering nominating Federal Reserve Governor Jerome Powell to lead the U.S. central bank, a move that would signal continuity for monetary policy.
The stronger-than-expected reading underlined the case for the Fed to raise interest rates at a faster pace in the coming months. Higher rates tend to make the dollar more attractive to yield seeking investors.
Friday was a ‘fun’ day for me. I decided to not actively trade but just monitor the market. Needless to say I could have jumped on board of the massive rally that propelled us into ‘new’ territory. New-ish… It was the end of 2016, beginning of this year that we have seen these levels before. After such a steep climb we are bound to have some correction coming up. I still have short positions open that are at a big loss so I am looking for a level that I think we can hit and I can get out. Obviously at a loss, but right now I am just hoping to limit my losses as much as I can.
I think we can see a pullback to about 53.70 maybe even 53.50 before we see another run up. If it does break the 53.50 point we can possible see a move towards the 52.80 mark.
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.