Extremely likely we have now seen the bottom in crude- Buyers are back so beware

Discussion in 'Energy Futures' started by spanish89, Jan 22, 2009.

  1. Im not into making predictions just for the fun of it or cos i have a stack of crystal balls in my living room.. :p

    I specialise in trading crude intraday revesals n pullbacks off big spikes,
    so the yearly picture of crude doesnt really affect my trade decisions that much.

    But i do now think with about 96% certainty that we have see the bottom in crude, and over the next few months even though its not gna shoot or float back up in straight line,
    there will be more strength on the buying at the lows of ranges than there will be in the selling at the top of them.

    (Market will very likely just range between 39 t 54 for the next few months,
    hopefully with lots of big violent intraday spikes and moves though :p ).

    The reason why i think its extremely likely that we have now seen the bottom in oil is based on the following-

    *$39.26 is the biggest most important key pivot level.
    Market goes under there and cant break back above then it goes and targets the low 30s like it did over last few weeks.

    But 2days ago when that level held oil bounced from there to the mid $44s!
    (no fundamentals or news out, dow wasnt doing much, dollar wasnt doing much, but there was tring buying at that level).

    *Yesterday it dipped down to the 40.86 level (the support level 2places above 39.26), but that held and it again bounced up very sharly to the high 44s n even 45s.
    (while dolalr was getting stronger and dow was barely above 8000)

    *Today we got the inventory numbers, build of over 6million for oil n gasoline, when only 1,5s was expected.
    (lastime 2weeks ago we got 6million it dropped market over $8s that day, and about 6dollars more over the next 2days alos just based on that).

    Yet today we got that, i couldn't even manage a drop on $2 dollars after the number came out, and then at 40.86 again there was alot of extremely strong vicious bying going on!

    It recovered those 2dollars in just 3 up-spike movements, and then went on to rise a further $2s.

    (so 8% rise in just a few hours, even when the dow was now down over 200points under 8000 and the dollar was very strong, and when there was 6million build agaisnt 1.5expected as the news for the day).

    This is all extremely bullish now, and so on the days when the dow gets stronger and rallies, and the dollar starts its pullback due to all the inflation that is gna be caused by all that money being printed its gna be very tough for anyone whos holding a sell trade when the upmove for that day starts... :) :D :cool: :p

    *Charts explain alot better than words though, and so i will post a couple of charts to help show
  2. Sorry if the chart looks abit messy,
    those lines show what are the key levels to watch,
    as the market always reacts when it crosses of the lines.

    Those red dots i made show the uptrend channel,
    and whats more interesting is that they are all at the key support levels.

    39.26, 40.26, 40.86, and i wouldnt be surprised if the next one forms at 41.62 or 42.26.. :)
  3. This is what I said yesterday, and you shot it down for the most part!?!:confused:
  4. and the monthly chart to show how the market it bounce and fitting into and building support on levels that are reflected across from the other side as previous resistance levels... :)

  5. Aloha mate.

    I didnt mean to 'shoot it down' as you say, and i wasnt saying you were incorrect,
    as you were right, oil prices cant stay this low for long as so are gna be rising soon.

    I merely said that i needed to see 39.26 restested a few more times before i would be fully convinced that the short sellers that move the market had switched to bullish now.

    I need to see 39.26 tested 6x and hold each time before im convinced the bottom is in.

    The real lack of demmand is nowhere close to as low as oil has gone,
    since 80% of people havent stopped all petrol use,
    its more like 10% t 15% max actually less usage in oil.

    But the short sellers who move the market arent gna let this float back up just yet.''

    Yesterday i needed that much to be sure, but after what happend today with the inventory numbers that is no longer nessesary.
    And seeing how vicious the buying was at 40.80/86, its clear that the short sellers have now switched to bullish.
  6. thanks for the charts!! much appreciated.

  7. Thats ok mate.

    You trade crude??

    Btw in my daily trading journal '5% - 10% profit per day' theres a small group of us who trade oil daily,
    and so anyone else who also trades it or is interested in learning to trade it is welcome to come and join in the chat n banter there. :cool: :p
  8. No need to apologize. Your chart made my morning a little brighter.

  9. And we got the next 1 in teh mid support between those 2 i said at 41.86
  10. Totally agree with you

    I have been selling USO puts fading this down move and while yesterday it felt like I was in the doghouse today I was in the penthouse.(I been moving a lot lately)

    regardless of where the price was yesterday or today its my belief that uso is not going to go under and stay under 25 in February.

    Best of trading to you
    #10     Jan 24, 2009