Bear Market Trader | Daily take on WTI crude oil
My daily take on the WTI crude oil market.

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 is for me to set up my bias for the day and look for sig­nals to start tak­ing positions. 


Sources will be list­ed at the end.




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. Under these I will list the items I think cre­ate a bias in that direction. 


Upward Pressure


The com­modi­ties that have a pos­i­tive cor­re­la­tion with crude oil are most­ly look­ing green. Although WTI is one of them, so only have is green and half red. But because of the green nod of the WTI I am going to put this under upward pres­sure. WTI shows open at 51.92 with a high of 52.16 and a low of 51.92. A change of 0.24 dollars. 

These have a neg­a­tive cor­re­la­tion on WTI so this looks like it’s press­ing upwards as well. Yes­ter­day these had pos­i­tive num­bers but that changed overnight. 


News — Crude oil prices gained in Asia on Wednes­day as indus­try esti­mates of U.S. inven­to­ries showed a large that expect­ed drop in crude, though prod­ucts showed gains over expect­ed declines.

Crude oil inven­to­ries fell by 7.130 mil­lion bar­rels, the Amer­i­can Petro­le­um Insti­tute (API) said oin Tues­day, more than expect­ed as gaso­line stocks rose by 1.94 mil­lion bar­rels and dis­til­lates gained 1.64 mil­lion bar­rels miss­ing expec­ta­tions of declines.

Overnight, crude oil prices set­tled flat on Tues­day as expec­ta­tions of a ramp up in U.S. pro­duc­tion weighed on sen­ti­ment while eas­ing con­flict in North­ern Iraq between Iraqi and Kur­dish forces less­ened con­cerns over poten­tial sup­ply dis­rup­tions in the region.

Crude oil prices came under pres­sure on renewed over­sup­ply con­cerns fol­low­ing data indi­cat­ing that U.S. pro­duc­ers will increase output.

The recent uptick in crude prices above $50 a bar­rel is wide­ly viewed as an incen­tive for shale pro­duc­ers as it’s the price lev­el at which they can ramp up output.

Traders said that prices were pushed up by a drop in U.S. crude inven­to­ries as well as con­cerns that fight­ing in Iraq and mount­ing ten­sions between the Unit­ed States and Iran could affect supplies.


Technical Analysis



On the 4‑hourly chart we can see that prices have been mov­ing above and below the first Fibonac­ci chan­nel line. Even though momen­tum seems to have lost a bit we can’t real­ly know if prices will move up or down. What I do think we can know is that a break of ‘for­ma­tion’ is going to hap­pen soon. Either between the Fib. chan­nel line and the orange resis­tance line or on the down­side. Mean­ing that same Fib. chan­nel will func­tion as the resis­tance trend line and the low­er orange trend line as the sup­port line. Let’s see what happens.



On the 30-minute chart we can see a bit bet­ter that at this moment prices have reached the resis­tance trend­line and are most like­ly to go down. How­ev­er, at this moment it is a ‘low volatil­i­ty time’ it might just ‘cruise’ right through. We’ll have to wait and see. 



On the 5‑minute chart we can see what I meant about the low volatil­i­ty a bit bet­ter. There’s not much action going on that builds the momen­tum for those pres­sure points I explained ear­li­er in pre­vi­ous points. If you’d like to know what these are please feel free to leave a com­ment or con­tact me direct­ly. I’d be hap­py to share with you the find­ings of my learn­ing so far. 




So I would say that I am still more inclined to short because we have returned to ear­li­er highs. At these highs I said prices would go down. I am won­der­ing if all that is hap­pen­ing in Iraq and Iran is enough to cre­ate momen­tum for prices to shoot through the dai­ly chart resis­tance trend line that is still in a down­ward trend. This might be the point where we will see this line break and wel­come in a bull­ish era. If we break this cur­rent for­ma­tion to the down­side we can prob­a­bly see prices go down to 50.20 again. If we break to the upside we can see prices go to 55 dol­lars a bar­rel. Anoth­er big fac­tor is going to be the release of the EIA report lat­er on today. Let’s have a look at some entry and exit setups. 


Entry and Exit



If we break the 52.20 lev­el I’d say we’re look­ing at a down­side move. Espe­cial­ly after break­ing 52.05. So for a move to the down­side I’ll be look­ing to short from those points on. If we break to the upside I’ll be look­ing to go long at 52.41 and my tar­get will be at least to 52.60. I think there will be a big­ger move since it is a crit­i­cal break in my opin­ion. The fun­da­men­tals sure­ly sup­port a move to the upside but we’ll have to wait and see. Excit­ing to see what will hap­pen today.


Thank you

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. 





Day trader. Tech geek. Sim racer/Pilot.

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