Off topics, on that NG play, if you see daily chart, NGM was not able to push above $4.40 since mid-March. It was stuck within $3.90 to $4.40. Then the weekly EIA is always volatile, but 4-week average is stable. Last week's # was bullish, so this week's # should be neutral or slightly bearish. Revert to mean. On the risk/reward side, even if the # is slightly bullish, the upside risk is limited. But downside risk is much more. No matter what, the amount of risk should be considered.
Although I can care less about the fundamentals, is this the reason for the rally today or was it just another vicious short covering? I know that the market (and not just this market alone) can remain insanely irrational longer than F12358 can stay solvent , but damn when will we get a clean flush for once? Anyway, check out this chart and observe how the trendline was breached, or rather diced and sliced, with hardly any resistance. Sickening eh?
I used to think this way, but recently i've come around to feeling that the market does reasonably represent market fundamentals. The reality is everyone knows that Oil is going to go up big, its only a question of whether its tomorrow, next month, or next year. But, it's as close as you can get to a "sure thing". The more clear it becomes that we've averted depression/deflation, the more this "sure thing" becomes an inevitability. Because it's a sure thing, it's going to continue to garner a high price, because in this risk-return starved environment, a sure thing is hard to come by. Also, because its a sure thing, there may be entities who are just buying and storing as much of this as they can get at $80, knowing they can make 10% or 20% on it within a few months or a year. On the other hand, i could be completely wrong and my turn in thinking could simply mark a near term top, followed by the sharp flush you're looking for...
I was very bearish on NG, since summer is rolling in, fundamentally it is trending down, but this magnitute of drop in one session is the first time I saw since I started to trade NG from last year October. when you look at the report number, you will see the trend. actually 4.4 is a strong resistance. I am betting it will go through 3.8 under this summer to 2.8 extreme level. so if it bounces back some, I will short it again. and I am very bullish on crude, I will buy those dips
exited 1 lot since it moved down .12 almost instantly when i shorted....not much since i was looking for a buck overnight, but im not going to pass up .12 instantly. holding the other lot overnight, see what happens.
I didn't even pay attention to the TL on the daily chart. I see now that yesterday's pivot low left a higher low in a long term uptrend. I guess we all should've expected price to then slice through the 20-bar MA and attempt to break the previous high. All this day trading made me myopic, which is why I nonchalantly chopped up my P/L on the open!
For oil, the long-term trend is up. We may see a test > $90, or even $100 by end of year. The medium term, it is stuck now at $80 to $90. It should not stay below $80 for long. Fundamentally, nothing is exciting. No shortage of anything. But with stock indices up 1.5% and Euro recovered from record low, CL has nowhere else to go. The day-long media coverage of the oil leak did not help either. Did you see some of the energy drillers who have offshore production were down today?
I ain't so sure I completely understood what you meant by "sure thang". Why must the oil go up? If so, what's the rationale behind it? I'm of the opinion that in a recessionary environment, oil basically follows the will of the consumers since it will be completely demand driven. Higher unemployment will force consumers to hunker down and tighten their belts. That means less leisurely travel and such unintended consequences (yeah right) directly spills over into the bottom line of the oil companies. Hence the reason why there's high correlation between oil and equity markets.