CL Redux

SH .90

just gonna hold it for a while...try to catch a a couple buck down draft

 

to day CRUDE OIL showed very interesting chart patterns, some of my analysis is after the fact. Here is 9/14 post market action analysis


edit: few typos in attached chart , here are corrections
3. Double bottom break down at 77.40
7. after break down to 76.20

 

your guess is as good as mine sal, the 2 lines on the right are the mp nips, 75.90 is the cleavage and we have a diamond pattern.this exp is tough to trade

 

just closed it for .14 gain...decided not to hold overnight. I would like to short a pop if there is one in the morning, however.

 

Discussion on OIL contracts volume
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Hi everybody I would like to start a discussion on Nymex CL volume , so that we all can have some better understanding of it .

Here is the base stat to begin with

http://www.businessweek.com/news/20...y-in-three-as-enbridge-works-on-pipeline.html
( the following is at the end of this URL page )

Oil volume on the Nymex was 862,469 contracts as of 4:34 p.m. in electronic trading in New York. Volume totaled 876,826 contracts yesterday, 41 percent above the average of the past three months. Open interest was 1.32 million contracts.
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Now taking this 860,000 contracts /day . ( this is all average , we know we have peaks and low volume periods )
If we take 8 hours active trading that works out as 100,000 contracts traded per hour.
=> so per minute it is 1500 contracts
=> so on a 5 min. bar chart that works 7500 contracts per bar

Now lot of people close positions at the end of the day. I myself do 20 contracts/day ( total buy & sells , this is what IB collects Fee from me).

Here are questions

1) Out of these 800,000 contracts there must be lots of them intraday , what would be that percent ? can we say 70% are intraday ???

2) out of these 800,000 what is the break up of small traders (like us here) , and big Traders ( professionals) , funds ..
can we say small traders volume : 10 % => that is 80,000 contracts volume
( assuming average small trader does 20 trades/day like me, it takes 80,000/ 20 => 4,000
it takes 4000 small trades doing in CL ( this sounds high number of small trades doing CL )

3) based on my analysis of 2) it seems small traders like us are not an influential at all . what I mean is I have feeling some time when small traders are sided onway ( as we usually do ) , these BIG traders PULL the CL in other direction.

But based on my above 4,000 small traders contributing to 10% of daily volume that is 80,000 contracts ( out of total 800,000 ) , It seems BIG traders are manipulating based on small Traders positions seems Wrong. Because it is only 10% volume, seems 90% trades are by big traders , so it seems it is competition between BIG traders themselves

Appreciate all your participation and your views so that we all can learn some thing from this.

 

all electronic trades are monitored,tallied net long or short, each trade has an id for the player so all your trades are marked with the same number,these systems are owned by the trading houses.. divy these up into sizes ,what size is the player and put him in a slot with those of lke size,in your most fiendish way ,try to imagine a way to capatilize on this,you bieng the trading house...now imagine it was legal...no laws stopping you

 

We have 3 pieces to OIL inventory number PUZZLE

you can find 1) 2) from this URL
http://www.businessweek.com/news/20...y-in-three-as-enbridge-works-on-pipeline.html

1) Analysts median estimate
An Energy Department report tomorrow will probably show that U.S. crude-oil inventories declined 2.5 million barrels, or 0.7 percent, last week, according to the median of 18 analyst estimates in a Bloomberg News survey.

2) API numbers actual (released )
Prices slipped from the settlement after the American Petroleum Institute reported at 4:30 p.m. that U.S. crude-oil stockpiles increased 3.33 million barrels to 361.8 million

3) EIA numbers ( will be released 10:30 EST on 9/15)

so Analyst estimate is draw 2.5 mil , where as API released 3.3 increase , both are conflicting by big margin

Let us see what happens tomorrow , my take is draw around 2 mil

 

Hi InvestVision,

In my view you're starting with the wrong data and making wrong assumptions. (Sorry )

Take a look at the time and sales at cme:

http://www.cmegroup.com/trading/ene...eSales_globex_futures.html#prodType=undefined

Take the T&S of every day for last week (this week people are already rolling contracts, so you'd get distorted data) and plot them in Excel. Then analyze the data by trade size (large traders don't trade 1 lots, even if they break down their orders) and time of day.

Then do the same for the pit-traded contract (only professionals).

And take it from there.

It's an interesting exercise, I did it about a year ago for CL, ES, ZB and EUR. When you do it we can compare observations if you want.

 

Thanks P for pointing the right source, I will do that.


Is it possible to add CL Excel files to thread so that we can focus more on analysis ( to save time on all that week download :- )

 

I suspect this news may be real reason behind today big drop in OIL.

53% compliance is real bad , the lowest I ever heard.
Compliance meaning , OIL producing countries agrees certain million barrels /day limit to produce , so 53% meaning they are producing way too much oil in order take advantage of high OIL prices .
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http://www.businessweek.com/news/20...y-in-three-as-enbridge-works-on-pipeline.html

The Organization of Petroleum Exporting Countries’ low level of compliance with agreed output cuts is not affecting prices, Secretary General Abdalla El-Badri said. Compliance is at 53 percent of limits, he said today in an interview on Bloomberg Television’s “The Pulse” with Andrea Catherwood.

“If the situation stays as it is, then $70-$80, this price is comfortable,” El-Badri said from Vienna.