CL Redux

I don't really watch other commodities, although I should. I mostly just look at a heatmap of the day to see whats gone up big and whats gone down big. Some of them just aren't suitable for scalping intraday really, which is all I do. I wish I had the guts to swing trade them.

You think reversion to mean works well in CL? That's interesting because my impression would be that CL is one of the worst markets for short term/intraday RTM. Just wondering why you think that about CL?

 

CL is well-known to retrace entire moves and more following a long strong intraday trending move. Trending days that close at highs or lows in the direction of the trend are pretty rare, from what I've seen.

 

What I meant was multi-day swing. Certainly not on an intraday basis. For the last 10 months, CL traded within a channel, bobbing up and down and it appears to adhere better to the RTM model than other instruments.

 

Ah I see, that makes sense. Most of my trading experience has been on the RTM equities side. Stuff like putting together a synthetic market neutral instrument out of non-news driven longs & shorts in a specific sector that float around aimlessly, thus creating an instrument which is mean reverting in nature and easier to avoid those losing fat tails events. Basically like ES, but only with boring non-event driven stocks in the same sector. The stuff that directional intraday trader stay away from since they just chop around.

 

If you were short at 97-98, don't worry, it's nothing compared to what I'm short at

 

Watch Saudi stocks for signs of deeper risk
http://blogs.marketwatch.com/marketjunkie/2011/02/23/watch-saudi-stocks-for-signs-of-deeper-risk/

The Saudi Arabia stock market should provide an early sign of whether spreading Mideast and North African democracy protests — and in some cases, the violent government backlashes that have followed — pose a deeper risk to global markets, suggested one analyst Wednesday.

Watch the “Saudi equity market (SASEIDX) for unrest signals,” wrote Michael Hartnett, Bank of America Merrill Lynch’s chief global equity strategist. He noted the Saudi market improved Wednesday after Saudi King Abdullah, returning to the country after a medical absence, announced nonpolitical reforms including housing and student support worth about $36 billion. After an early-afternoon uptick, Saudi Arabia’s all-share index ended off 0.2% on Wednesday.

For U.S. stocks, a supply-side shock to oil prices that reduces U.S. gross-domestic growth estimates to a range of 2%-2.5%, from 3% to 3.5%, would be a negative, Hartnett said. But there would have to be unrest in Saudi Arabia, the world’s largest exporter of petroleum, to cause oil prices to spike $10 to $15 a barrel and cause a cut to GDP estimates, he said. — Laura Mandaro

 

Hearing on CNBC now that reporter in Saudi Arabia is saying Saudi's are ABSOLUTELY JOYFUL and HAPPY that the King is back. He is saying it is nonsense that unrest could spill over into Saudi Arabia.

 

Don't get me wrong. I love the Saudis and all their dictators we Americans supported for the last who know how long. But what a friggin' nonsense I hear. Why must a change of regime be considered negative for oil? The spigot would still remain open after the revolution whether we like it or not. But I say screw oil for once in the name of democracy.

 

I think that's how it was for Egypt, that's how it is for other countries but when it comes down to psycho Gaddafi and Libya, it's not gonna work like that. He wants to break all hell loose. But then again, U.S. imports of Libyan oil are so minor that I am still surprised to see this much of a price jump. Even with Libya's exports to the rest of the world, the Saudi's can easily replace it. And yes, you have more sulfur in Saudi oil but how much does that really add to the cost of processing the oil?

 

Here is the link with article in the reporter's own words:

http://www.cnbc.com/id/41743620

Commentary: What Saudi Spillover?

Oil traders fearing Saudi spillover should have been with me tonight trying to get back to my hotel after dinner in Riyadh.


Fayez Noureldine | AFP | Getty Images
Saudi youth wave their national flag as they celebrate the return of King Abdullah bin Abdul Aziz in the Saudi capital Riyadh.

A trip that should be 10 minutes took over an hour as we passed through scenes reminiscient of a world cup football victory.

The main street of Olaya, Riyadh's financial district, and the streets around are jammed with cars and people celebrating, honking horns, cheering.

Everyone is waving green flags and pictures of King Abdullah. When I ask a group of youths why they are so happy, they say "because our King has come home." They seem genuinely joyous.

The fact most of these people are young is very telling. There may be an unemployment rate of 39 percent for people between the ages of 15-24, but there appears to be no shortage of love for the king.

If these scenes are being repeated across the country, and I was trading oil right now, I would be wondering when to short.

The scenes I have witnessed here are totally incompatible with oil traders' fears of a Saudi spillover. The idea of regime change seems just about the last thing the youth of Riyadh want.

© 2011 CNBC.com