Mac First â change the color of your volume bars to one color â the red/ green thing has a tendency to sway oneâs bias / close oneâs mind off What youâre seeing is a controlled distribution of a position and/or a controlled establishment of a short position Controlled in the sense price is being supported â driven up â then sold off / shorted into (causing price to swing down - but not too far down - yet) ==================== Folks say they donât know if the high volume is buying or selling â one way to tell.., is ask yourself; With the high volume â if it was indeed buying â then why didnât price continue going up⦠Simple.., because it was distribution and/or establishing a short (either has the same impact) Butâ¦, they didnât want price getting away before the majority of the transaction was completed⦠So they allowed price to drop only so far before supporting it (limited buying) â creating another run up â in which they again sold / shorted into This is market mechanics 101⦠AND⦠another aspect of reading PA When one has hundreds of millions.., if not billions â to spend â entering @ mkt / or even via limit orders will totally fuck up oneâs ave cost basis These boys control price.. and the herd â they typically donât get screwed by either â SHTF events notwithstanding ================= Another way to look at this â see the chart... and what happenedâ¦. (direct auction â where the herd lives) Butâ¦, also try to see what had to happen â behind the scenes â to create the chart⦠(the indirect auction where the big boys play) ================== Why folks canât simply answer a damn question is beyond me RN
Thank you. I figured it was larger players selling into the new swing highs, but I was missing the "controlled distribution" part you mentioned, so I was was a little confused as to why it kept rising if the big guys were selling. Makes more sense now.
Now does anyone know of any resources which go into more detail regarding the type of trading that takes place in CL specifically? For instance how much of the volume each day is due to hedging activity? How much is related to options? Who are the largest traders in CL? How much of the daily volume is from the public small-time traders? Etc, etc, etc....... I'm not wondering because I think it'll lead to stellar trading results. I'd just like to understand the market I trade rather than restrict my knowledge to just watching charts & drawing lines all day. You never know what a more thorough understanding might lead to.
Mac: I'm not really into these things but I can add a little to what you are seeking. CL Futures are traded electronically and in "the pit". As you probably know the pit is not open nearly as long as are the electronic venues. The Commodity Futures Trading Commission (CFTC) is the federal agency that is responsible for regulating such trading. The CFTC is supposed to control the maximum number of contracts any single entity can control. How well they do this is a matter of conjecture. The CFTC has published a "Commitment of Traders Report" report for years. It is supposed to show the open positions (short and long) held by various categories of traders. Take a look at this page, it might give you a bit more understanding of what is going on. http://www.cftc.gov/marketreports/commitmentsoftraders/index.htm Note that the contract and options on contracts are covered. Jack
All of these are dynamic in nature and fluctuate daily. When prices are high, producers hedge. When prices are low, consumers hedge. Meanwhile option market makers are laying off deltas on the screen as option flow arrives. Swap market makers are laying off risk in the futures as OTC order flow arrives. You should also bear in mind that the 3:2:1, and 2:1:1, and 1:1 crack spreads all have an effect on crude. Winter demand for crude is driven by the demand for heating oil/gasoil while summer demand is driven by the demand for gasoline. Between seasons refineries switch from producing more HO to producing more gasoline or vice versa (shoulder months).