Stopped out CL again

Got stopped out of CL long at 90.17 this morning. 

Crude took a nose dive today because the Obama administration announced that it will release 60 million barrels of oil from the strategic reserves. I am not sure how they could justify doing this since there is national no emergency going on. I guess its election time. This is basically the crude oil version of the Fed's QE. Its very difficult to trade the markets these days with so much government interventions.

Stopped out of CL long

I got stopped out of long CL position @ 91.79 earlier tonight, in pre-market trading. I normally don't like to get back in the same position that lost money, but CL is volatile, so $2 movement is nothing. We are still within channel. I am still expecting a 3-5 day rally across all risk asset, so going back in.

Just went long again @ 92.17
Target 97.17 (will re-adjust later)
Stop -2 @ 90.17

Friday 6/17

Long CL @ 93.79
Target  97.79 (will re-adjust later)
Stop 91.79








I have been sitting on the sideline for a week now. I missed the chance to short and didn't want to chase the market down, so the safest thing to do was to sit on the sidelines and watch. My main strategy right now is to sell the rallies, until, or unless rumors of QE3 start floating around. At the same time, it's not a good idea to just play one side of the market, or develop strong long term biases while doing short term trading. So I will take long positions if risk/reward ratio warrants it, but will use tight stops.



I think this is a good time to take a short-term long position. Most of the markets like ES, CL, EUR, etc, look oversold on the short-term charts, and have reached support levels on the daily charts. I think we might get a 3-5 day relief rally at any time now.

EUR/USD

Watching EUR/USD on hourly for break down. It would be nice if it rallied first to put a double top before breaking down. But it may not. Its a bit late in the day for a break down though. Big fx moves usually start during London session.

Closed out ES short

Closed ES short @ 1284.25 for net profit of 26 handles

Didn't want to wait for the original target of 1274. Looks like the market is finding a short term bottom here and I am happy with 1284. This market is choppy. The key is to trade short swings and collect small profits here and there. Will now go back to the sidelines and look for another trade opportunity.

Tuesday 6/7

The selling is losing steam, but I don't want to close the position yet. I think we'll continue to get choppy action with overall direction being down.

I have moved stop on the open ES short position to slightly bellow break even at 1309.











The most interesting thing is that both the Dollar and ES have been going down together lately. This is the first time this has happened since the crash of 2009. Does this mean that risk trade is decoupling from the Dollar? Maybe QE is ending? Hard to tell. But the market dynamics are clearly changing.

Thursday night - Short ES

I just shorted ES @ 1310.25
Target 1274 (will adjust later)
Stop 1326


Logic for entering trade:

1) The market's quick snap back yesterday put a bullish hammer on the charts, but I am not too impressed by it. Bullish hammers are only meaningful when they show up at the bottom of a massive sell off and are accompanied by large volume. Yesterday's action doesn't match that criteria.
2) We have LH and LLs on the daily charts. This means the trend is still down.
3) ES broke the uptrend support line at 1310 yesterday, but it's now hugging it in after hours. When the market breaks a support line and then snaps back above it, but fails to clear it decisively, and then hugs it for a sometime, its a sign that support is about to break.



I have set target to 1274, but I don't really have a good idea for a good exit at the moment. There is no immediate support bellow 1310. The next big support is way bellow at 1240. I am attaching a long-term SPX chart to show how I calculate big support lines (SPX charts are better than ES at showing long-term trends). Next big support is near 1228-1240 levels, which is where the 61% fib, the previous major uptrend line and 200 day SMA intersect. But I don't expect a big wash off sell to that level. I am still expecting choppy action for a while. This is a good market for quick in and out trading, so I am keeping tight exit/stops.

Exited CL trade

Target hit on CL trade. Exited @ 98.50 for 1.65 profit. 

That was tick perfect. It went as lows at 98.48 and then bounced back up.

Crude

Just shorted CL @ 100.15
Target 98.50
Stop 101.75

I am expecting the sell off from yesterday to continue.There is support at 98.50 and bellow that at 95.