A little past 12:00pm on 12/23/2009 CL futures had some size rolling through the tape and delta charts (pic). It was not unbelievable size but definitely noteworthy considering light holiday volume. The session was trending up all morning and beginning to build value around 75.50. Normally when I see size like this with the CL futures price snaps off levels easily. This session the orders hit and price did not move a tick higher for quite a while. Could someone experienced with tape reading please explain what is going on here? Are the market makers holding too much short inventory with such a long biased session, trying to pin the offers in attempt to balance at better prices?
you answered it yourself i.e. light volume and I highly doubt MMs are holding short inventory as MP over the last week indicates otherwise
Those orders coming through the tape are not light and like I said normally easily move the CL market. The OVERALL volume was light which should make it even more likely those blocks lift the offers.
Why is this important.... ? Who knows, could be anything. Lots of volume in commodities trad off exchange, so looking at Volume you are not seeing whole picture.
It`s important because trades are obviously going to work out better when you`re with size. When size that usually moves the CL market easily suddenly does not move it a tick higher for over 30 minutes I would like to know why. Also, almost all the volume in CL futures are trading on the exchange. Please, no more replies if you obviously have no idea what you`re talking about and do not watch order flow.
It was the last full trading session before Christmas. There were fewer speculators in the market who are more likely to be "spooked" by larger volume and spoofed by "larger" bids and offers. The same thing should happen closer to New Years Day too. We'll see.
That guy does have a "point". By watching only crude oil futures, you don't know for sure what's happening in other related derivative and cash markets. Crude oil futures are a good "snapshot" but not a complete "picture" of everything.
On December 23/09, CL G0 was in consolidation from 10:30 eastern until pit closing. The range was basically from 76.50 to 76.00. It is unusual for CL to be in that tight of a consolidation for so long. That showed most traders had gone home. The market was not interested in doing anything, volume or no volume. I use volume but I donât think that you can use volume without regard to what is happening. Unusual volume is more significant at known sup/res points or when the market direction is strong. An example is the volume at 9.12 eastern this morning. The bar came on a move up from pit opening at 9:00. The volume was on a down bar at 79.80, yesterdayâs high. Even here the volume has to be interpreted. Does the volume at possible resistance mean the longs are exiting their positions? If so, will CL now consolidate or will it move down? As it turned out, CL moved up slightly to $80.00 and rejected there and went down. If the market delta would have provided any good clues around 9:12 eastern this morning, I would appreciate it if you let us know.
So lets say I sell 10,000 lot swap over the counter with BP. Nobody knows about it really. I then buy a call as a hedge because im right and the market came off a bit and call premium went down. Throughout the day in random amounts I just come in a hit bids for what you call "size" in the electronic market because that where I can get off smaller pieces than y trade with BP. Well, your looking at the volume and blowing a load, you being fooled by randomness. This is one of many many reasons you see "electronic" volumes........