I'm 90% certain that we're bottoming out. However, it's always that remaining 10% that drives me up the wall. I don't believe we will go down to 70 (but one can never be too sure in this game, now can we?), but 73 would not be out of the question. As I said before, keep your eyes out for a complete flush of the remaining buyers.
Funnily enough I saw this whole decline coming....literally almost point for point and ever since late December. I even called it pretty much to the point-high on here a few weeks ago in a thread or two. I even drew up a battle plan, as i was looking forward to this whole situation. First, i lightened my longs big time. Second, i mostly started ignoring all long signals from my swing trading system for the last couple of weeks. Third, about three days ago I moved 50% of my 401k into a money market account (i moved 25% back in as of close today). Wednesday i was even lucky enough to be short crude and the ES going into obama's speech. In spite of all that, i F'd up big time in this whole decline. I should have made a killing, instead i let scalping mistakes get in the way of a swing trading gold mine. I was doing fine, but the last hour today taught me a lesson i won't soon forget. Funnily it was probably an easy hour to trade technically speaking, but i got caught up trying to pick the turn. Anyway, that aside, my expectation was always that we would bottom at 1080 on the ES, give or take. That would have been the natural course of a profit taking pull-back. I was fully expecting to get extremely long at that point (which i already pretty much am) and rocket my way to extreme profits. However, this whole Obama bank restructuring plan is a major added twist i didn't expect. We would have corrected to 1080 anyway, just on account of selling off on good earnings reports, as was already happening. But, China overheating, and Obama bank busting are two additional wild cards, and so far they are starting to make me fear we may go quite a bit lower. Looking at some charts over the last 4 - 5 years, I wouldn''t be surprised if we break down toward and possibly through the 200 day moving average on the ES (temporarily). I sure as hell hope not, since i am pretty much already completely long as of this afternoon, but the situation is seeming pretty dicey.
What if there is a terrorist attack? The friggin Brits have to scare everyone over a weekend. I'll be going long Monday but with an almost equal delta of April 70 CL Puts where there is some good open interest. Imp vol has only gone up about 2% over the last 2 days which is big money for those who already owned them but who the hell is that smart? When I look at this daily chart I see a 50% 50% chance of it gone up or down $5. It closed below the 100day but its still within one standard deviation. I love this shit!! Before I left today I put in an order the buy some ES at 1090 just for shits and giggles and then I check it on my phone and I saw 1088 and felt happy and sick at the same time. If ES = 1070 does CL = 69?
Well, my fear exactly about 1070 on the ES = 69 CL. And at this point, i expect further ES downside, possibly as low as 1050 (probably the lower extreme). Listen, and trust me on this, the "good" earnings are pretty much out of the way. Wait till all the consumer discretionary companies start reporting. It won't be pretty. Or, at least, there will be plenty of downside catalysts. Anyway, I'm hoping for a bounce MOnday....if we get a significant one I'll shed some longs. Somehow i doubt we'll get anything significant.
I'm going to go with a low of 1065 on the ES as the low, with a bounce on Monday and maybe Tuesday. I dont see a catalyst at this point for it to break the early November low.
Who sez ES and CL must share the same bed? Just what if the two decide to split and go their separate ways? Inflation ain't a joke anymore that can easily be swept under the rug. With the record unemployment stubbornly holding out, you're looking at STAGFLATION. Should that be the case, CL can shoot up while ES falls flat on its face.
Totally agree with that sentiment, but given the current supply/demand picture, it just would seem surprising for CL to start trending up with no ES support. Of course, CL has had ridiculously bullish tendencies for pretty much 3 years, so I'm probably wrong and thats also why i'm swing long at this point.
Iâd appreciate any information you can provide http://www.elitetrader.com/vb/showthread.php?threadid=188981
http://www.traderslaboratory.com/forums/f3/continuous-futures-chart-question-3659.html These people were wondering the same thing. TOS does this for ya i think, I often wondered how but I figure that is why I pay them so much freaking money! What do your daily's look like? Or are you talking about a daily for further out month? also found this: Misconceptions about back-adjusted contracts Many traders are happy to see spurious price gaps removed from their continuous contracts but are unhappy with the result. They complain that the back-adjusted prices are not "real", often citing the fact that in some contracts the historical prices are actually negative. Traders looking for real historical prices should consult their spliced charts. Prices in a back-adjusted series are adjusted deliberately, so the complaint about "unreal" prices misses the point. Gaps in a back-adjusted contract disappear because historical prices are altered. There is no other way to do it. Trading reality versus historical price reality If the prices in back-adjusted contracts are mostly spurious, then of what use are they? To answer this question, let's imagine that we enter a position in Lean Hogs on the first day in the series and hold it to the end, rolling the position forward from one delivery month to the next. If we ignore commission costs and execution "slippage", the back-adjusted chart can be used to calculate the exact value of the position at any time. Back-adjusted contracts represent a different type of reality - trading reality. They show exactly what would have happened to a trader who held a continuous position in any market. Therefore back-adjusted contracts constitute the perfect resource for computerised system tests.