Good morning everyone, If you have read my analysis for last Friday, you know that I had a very bearish bias for that day, but expected the market to stay in it's range from the day before. Very early in the EU session I took a short trade, to fade a small up move. I could have made a maximum of 237 Ticks on that one trade, but manged the exit very poorly and got out with only 10 Ticks of profit. Ok, even if I had managed the trade perfectly I never would have capitalized on the whole move and got out at about 60 - 80 Ticks, because I wasn't expecting the market to break out of it's range. As you can see the relative volume indicator I use to determine day-types, showed a significant deficit (-183K contracts) in trading volume on Friday. Normally if the volume is this far below the average, the market doesn't leave it's range. Today's analysis Fundamentals - US/China Trade war import duty on WTI - Futures roll over to August 2018 (Following price levels may vary for you) Technicals - Major selloff on Friday on relatively low volume - Broke the previous low at 64,22 - Expected retest of that area (64,21 - 64,37) ^CL M60 ^CL M10 TPO/Volume Profile Daily - The market should stay bearish for the day, but I don't expect another big move, because of the low relative volume we are seeing - I will be looking to fade a correction into the 64,21 - 64,37 area - If the market has the power to push through that resistance zone I will fade it in the 64,75 - 64,85 area, which aligns perfectly with the 61,80% Fib. - This is a decision making zone. If the market can stay above it, I will enter into a long position on a retest - Other key levels to watch: - 63,62 - 63,77 (Major support, potential profit taking target) - 63,32 - 63,42 (Support, profit taking target) - 62,97 - 63,06 (Support) - 65,12 - 65,22 (Resistance) - 65,47 - 65,62 (Resistance) Verdict - I'm looking to fade a correction of Fridays move, but won't expect the market to put in another big move to the down side - Possible bias switch to long if the market can hold above the 64,75 - 64,85 area If you have any questions about my analysis, please feel free to ask! Gl & Hf trading Linusoverload
Linusoverload, Quick question... You are using Market/Volume Profile. Curious as to why you wouldn't be looking at reversing to a long bias after price broke above the 64.90 level? Or at least be neutral between the 64.90 and 66.60 range?
I don't know. I sold the August Crude - 65.42, I use a wide stop. I don't read technicals on market volume. How would you know if those guys are net sellers?
I'm still in it, I use wide stops. This is a tuff short, quite a bit of a squeeze. I'm still in it...
To be honest I think my analysis for yesterday was a little off anyway. As I said in the verdict I was looking at the 64,75 - 64,85 area for a possible bias switch to long, if the market stays above it.
Yes was tough to stay short with everyone falling over each other to liquidate their short positions. Your trade looks pretty good as of today!
Now I'm at a point were I can move my stop to 65.41 (Break even + 1) and let this short crude trade ride hopefully much lower. I would argue that yesterdays UP move, was a very much exaggerated short squeeze/panic. The "Squeezers" did a hell of a good job taking the crude market much higher than it should have gone. In my opinion. Even when I entered my "text book" short at 65.42, I started to second guess myself after observing how strong the reversal was. In hindsight my entrance was correct, but that was not an easy trade. All of the "market Profile" and pivots and other crap is good and all, but being able to understand "the story" and visualize what is really happening, is critical in predicting this stuff. Yesterdays story was, wow... The shorts woke up this morning on a Monday half asleep and their beautiful profits were dwindling, and being taken away, and it got even more rapid as the day went on to the point where many covered... This caused the exaggerated move UP, that in my opinion was TOO exaggerated. Just my too cents in trying to analyze this crap. Now at this moment, you MIGHT see a "trend continuation" lower... but the story is ... Lots of longs hopped on the ship yesterday during the short squeeze, now they are being squeezed and have to abandon ship. The bad ass traders, either held their short position from last week, not giving a crap about this squeeze and handled the pain... or simply shorted the spike yesterday (me, but I'm no badass, Badass' trade 100million +)