Whaddya gonna do. Take it on the chin and move on. Interesting Crude trade. CL has dropped from 100 to 92 in a few days because people are worried about the SPR realease. Talk about being priced in. The last few times over the years the mkt has dropped huge on news of SPR release, only days later to retrace all fo the losses. With the move down already and SPR priced in is setting up for a sell the rumor by the news trade. That or they don't do anything and it heads back up. Seems like a great risk reward trade.
So I have uncovered the price driver theory? Damn.... Personally....I wouldn't step in front of the Crude train down, but once it shows a sign that it's bottomed out, agree that a long position makes a ton of sense. Two areas I would be interested in on the way down are 90 (psychological) and 87.50 (decent spot on a daily).
JCP has technically been in an uptrend since the downtrend confirmed a reversal back on August 10th. The possible reversal was signaled by price pivoting back up off a higher low on 8/6 and the higher low was defended successfully. The "confirmation" occurred on 8/10 when price gapped up through previous resistance (23.16 zone) and that previous resistance level was not even touched on 8/10 and 8/11. This means we have a low (1), a high (2), and a higher low (3), and this common 1-2-3 reversal pattern is confirmed by a break thru 2, in this case, the break through 23.16. The uptrend remained strong since then with no significant pullbacks until 9/13. JCP has a short interest of 30% meaning they're ripe for a massive short squeeze if price breaks a very key resistance level. Key resistance is the high on 5/16 (30.02), which was a huge gap down day. The support level prior to that gap down day was the 32.50 zone. The space between that gap down high and previous support level is empty "airspace", to the tune of about 2.50. Technical traders will add to winning long positions on a breakout into that airspace and short sellers will have stops above 30.00. Once price breaks into that airspace, nobody who is long has any strong reason to take profits until price approaches pre-gap support around 32.50. Does that make sense? Bob Volman defines trading like this, and I really like this description a lot: "...how is it possible that a trader would be able to trade anything at all, and walk away with consistent profits to boot? The answer to that is simply that the smart trader does not trade the underlying instrument, he trades other traders. And more so, he trades their pain and incompetence. He trades the fact that they have to react to their many mistakes to protect themselves. He exploits predicament and agony, all of highly visible on a technical chart. To exploit others more than being exploited himself should be the ultimate satisfaction of any trader who is not in this business out of philanthropic idealism or to indulge in masochistic tendencies."
TA Price Drivers can be like elephant footprints. A few days back I posted the Gap lines and said we would get turbulence here. The S&R played out perfectly and the smart money hit the market hard - where the TA was waiting for them to show their hand. If that doesn't grab your attention, nothing will TA - follow the money!
Surf, where is your stop on this? Be very careful here. Do not hold this position without a stop. I watched oil drop 9 pts in a straight line in a single trading session not too far back.
Don't you read this journal? He said stops are for weak hands, nervous nellies and overleveraged pikers! http://www.elitetrader.com/vb/showthread.php?s=&threadid=247038&perpage=6&pagenumber=27
Surf, just admit it. Your "drivers" are a simple reversion mechanism operated by a couple of blind mice with "strong hands."
i had a futures broker back in the 80's who was always getting on the wrong side. 95% accuracy if you took the opposite trade. so i followed his forecasts to the letter, but at a competing firm and opposite the position. i was long the grains in 1988 from feb to august. a classic year of the drought. in july the beans had an expanded daily limit along with the other ag products. sit on your hands and let it go straight north. when he blew all the client money on the short side, he then advised buying some calls in august to get their $ back. i immediately closed my longs on that friday. over the weekend, the rains came to the mid west for the first time in a few months. beans opened limit down and moved limit for a few more days. the broker retired from futs. and went into equities. that was the best indicator for the ag complex i ever had......... trade the trader.