CL Looks Tired (3/26/2013)

Discussion in 'Commodity Futures' started by RedSun, Mar 26, 2013.

  1. RedSun


    1. Divergence from stronger dollar/weak EUR;
    2. Strength on still weak fundamentals;
    3. Strong up moves on so-so econ indicators.

    CL has diverged from dollar index and equity index. I'm not sure what is driving it now :(
  2. Supply and demand. Same as it always is.

    In my experience most perceived correlations, when properly analysed, are not statistically significant and can be attributed to coincidence.

    I do miss the crazy days of 2011 though when crude and natty would regularly offer up 100+ tick swings several times a day. Volatility and volume these days are piss poor. You have to work with what you are given though...
  3. onava


    CL topped yesterday. so today is a short day
  4. RedSun


    Traders only care about supply/demand on the EIA report days. Other days, it closely follows $ index and stock index.

    The ATR for CL now is $1.65. That is a large swing. So I do not know what you complained about :p
  5. I beg to differ. Professional traders care deeply about the supply/demand dynamics throughout every session. Each to their own though.

    $1.65 is nothing. A few years ago there were regularly days when the cumulative total of tradable swings topped 500 ticks.
  6. RedSun


    I do not know what you were talking about. $1.65 daily swing is nothing?

    What is your "cumulative total"? Of course if you add the swings together, they can top $5.0.

  7. These days you are lucky if you get one 100+ tick swing per day. The spot Crude Oil VIX closed below 18 yesterday ( Not much doing I'm sure you'll agree.

    Add the swings together. If you are a professional intraday trader then you should be aiming to trade any and all volatility offered to you. ATR is a fairly worthless measurement when assessing market opportunity as it doesn't reflect the price movement within the range.

    Anyway, all the best with your trading. Let's see what happens today. At the moment it looks like consolidating.
  8. RedSun


    Today's market is a good example. CL just tracks dollar $ or EUR in this case. Fundamentals, who cares.....

    If EUR recovers, CL follows. Stock index goes up too
  9. bone

    bone ET Sponsor

    The refined products seem to hold a bid through this much better than CL.

    We are awash in CL. No shortage of crude, especially in the US and Canada. Lots and lots of it. We really don't need the Arabs that much any more - which is a very recent and profound change in dynamic.

    And West Coast and East Coast refining capacity has been declining and plants get closed. The pressure from the ruling politicos necessitates it. Got a $10 B refinery on the East Coast ? The lefties in charge might not bother renewing your operating permits.

    Refining capacity - that is another matter altogether. The ability to convert raw crude oil into a suitable consumer product - that's a trick these days. Says something that Iran has to buy gasoline from the United States.

    It's all about the U.S. Gulf Coast, baby. If those states ever go Blue politically then we'll have our $10 per gallon gasoline. Simple as a State not renewing site permits.
  10. RedSun


    Someone said CL trades with energy supply/demand fundamentals. Good luck with it.

    What fundamentals drive CL up again, although only slightly? Fundamentals have been bad or bearish for a long time. And CL only dropped with the euro crisis. Now it is up again, even divergent from the EUR....

    I think traders know the summer driving season is coming, and gasoline should drive the CL. This is nonsense. Gasoline comes from Europe where demand for gasoline is weak.
    #10     Mar 27, 2013