Sunday, July 28, 2013

Update for the week of July 26th, 2013

Welcome back to CRI's ongoing Crude Oil Day Trading Blog.

The first picture is daily, weekly and 120 minute charts with Crude Oil's term structure and CoT summary for the week of July 19th, 2013. Each trading day (time permitting) a 15 minute chart is added and trades for that day are reviewed:




Market Overview: As the summer doldrums role on we saw yet another week of relative quiet trade within the currency space. Indeed, many pairs look much better vs. the greenback as compared to just a few weeks ago. With little significant economic news until Labor day, one does have to look at the next month\'s price action with a bit of a skeptical eye. Is this period of calm setting us up for some serious fireworks come this fall? Elsewhere, grain prices continue to fall as the looming 2013 historically large harvest draws closer. With little news of drought or floods, the market is now pricing in a very big crop.

Weekly highlight: This past week saw the market slowly take back a large portion of the blow off top that took us up above $108. As pointed out previously, that level was a significant bullish price objective so it shouldn't have come as too big of a surprise to see us consolidate the rather impressive gains seen over the past few weeks. Two significant short term targets remain to the downside (the 'C' point low of 103.73 and the Daily gap at 103.31) and shall be my bearish target area for the coming week. A 50% retracement of the sell off (assuming these lows hold) would take us up into the 106 to 107 area and that shall be my bullish target area for the coming week.
 

Trading Plan: For this coming week I plan to trade at least 3 of the upcoming 5 possible sessions and only once per trading time frame. I booked 31 ticks in profits last week (trading 2 of a possible 5 sessions and once per day) and need just 5 ticks net to reach my current combine's profit goal. All trade considerations will be of the AB=CD model setup and will follow strict trade management rules. I shall risk being wrong only once per trading day and will only risk 11 ticks per trade. This will equate to a total of 3 trades for the coming week. Follow the model, take valid setups and move stops according to preset rules...

Probable outcomes:
0% - 3/3 (3 x -11.5) =  -34.5 ticks (miss combine objective by 30 ticks - qualify for roll over)
33% - 1/3 (2 x -11.5) + (1 x  20) = -3 ticks (miss combine objective by 8 ticks - qualify for roll over)
66% - 2/3 (1 x -11.5) + (2 x 20) = +37.5 ticks (meet combine objective - take next step with TsT)
100% - 3/3 3 x 20 = +60 ticks (meet combine objective - take next step with TsT)

I will admit, if I hit the profit objective on either the first or second day, I will probably book 1 tick losses for any remaining days to ensure success.

That's all for this post, 
Brian Beamish FCSI
The Canadian Rational Investor
the_rational_investor@yahoo.com
http://www.therationalinvestor.ca
http://crisdaytrading.blogspot.ca/

July, 2013 $30k trading plan:

 

Sunday, July 21, 2013

Update for the week of July 19th, 2013

Welcome back to CRI's ongoing Crude Oil Day Trading Blog.

The first picture is daily, weekly and 120 minute charts with Crude Oil's term structure and CoT summary for the week of July 19th, 2013. Each trading day (time permitting) a 15 minute chart is added and trades for that day are reviewed:



Market Overview: There was little significant change seen across currency land this past week suggesting recent price action is range bound for the time being. Seemingly cheering this relative calm, commodity markets continued the general bounce coming out of the 1st 2wks of Q3\'13. Energy prices seem to be leading the surge of late as Crude Oil has hit and exceeded both daily and weekly price objectives. Of particular note this week, Cotton looks to be setting up an interesting weekly long AB=CD pattern and presenting a 3:1 reward to risk trade - something for CRI\'s OnlyDoubles Trade blog to take a serious look at.

Weekly highlight: Price steadily marched higher over the course of last week ultimately hitting the rather well defined Bull ab=cd price objective of 108.05. Indeed, price spike momentarily higher, only to fail through the course of Friday's weekly options expiry and industry's roll out of August and into September contracts.

While upside price objectives have been hit and even exceeded on all three time frame charts referenced above (120 minute, Daily and Weekly) both the daily and weekly charts are firmly pointing up and could still move higher should the economic data and or geopolitical news warrant.  I shall be looking initially for a test of the 106 area (120 minute 50% level and key lows) but should that level fail a nice test of the uptrend line (outlined on the 120 minute chart above) corresponds with the 1-4 hour OTE long sweet spot and would be an ideal level to consider getting back in on the long side of this market.
 

Trading Plan: Along with my very strict momentum model setup I now use a harmonic ab=cd price pattern setup. Both models are conservative and relatively reliable (far greater than 50% accuracy). 

For this coming week I plan to trade at least once per trading time frame. I don't expect a strict momentum trade to develop and anticipate all trades to be of the ab=cd model. My goal for the week is to net 50 ticks. I will not risk more than 20 ticks per trading day. Follow the model, take valid setups and move stops according to preset rules...
expected 20-30 tick reward (25)
expected risk 10-15 (12.5)
expected trades: 10
expected performance 60%
6 x 25 = 150
4 x 12.5 =  50
= +100 ticks

That's all for this post, 
Brian Beamish FCSI
The Canadian Rational Investor
the_rational_investor@yahoo.com
http://www.therationalinvestor.ca
http://crisdaytrading.blogspot.ca/

July 21, 2013 L&B $30k combine trading plan:

Cheers

Sunday, July 7, 2013

Update for the week of June 28th, 2013

Welcome back to CRI's ongoing Crude Oil Day Trading Blog.

The first picture is daily, weekly, 180 minute charts with term structure and CoT summary for the week of July 05th, 2013. Each trading day (time permitting) a 15 minute chart is added and trades for that day are reviewed:




Market Overview: The US Dollar forged to new highs this past week on optimism about the US economy and the prospects for higher not lower US interest rates going forward. Additionally, the greenback has caught a \'fear bid\' as it appears instability within Egypt has once again captured the world\'s attention. Interestingly, NyMex Crude Oil surged (on that instability) & hit its weekly upside price target - seemingly the only bullish commodity chart I can see at the moment. As has been previously highlighted, both the commodity currencies (the Aussie & Cdn. dollars) continue to see heavy downside pressure. Indeed, the two appear to be the focus of this latest round of global currency re-balancing as the world\'s appetite for commodities in general wanes.

Weekly highlight: Large institutions appear to finnally be getting paid for their recent overt bullishness. Prices moved dramatically higher through the week as the double bottom form late last week held and extended through the all important 99.21 peak (from June 19th). Several bullish ab=cd price patters appear to be at work suggesting futher upside price pressure is in the works for the coming sessions. Considering too, that this is the first two weeks of Q3'13, fund managers appear to be loading up on Crude oil in particular as price has basically moved straight up through the entire first week of the quarter. It shall be interesting to see if price calms through the end of this week or if we continue at this torid pace.


It is very important to note, given the light holiday sessions and the end of Q2'13, I would be reluctant to hold any position or significant bias in earnest until we are on the other side of the holiday and indeed, the first two weeks of Q3'13.
 

Trading Plan: Along with my very strict momentum model setup I added a play/setup off harmonic ab=cd price patterns.Both models are conservative and relatively reliable (far greater than 50% accuracy) so I am very excited about my new combine that shall start Monday morning. Follow the models, take valid setups and move stops according to preset rules...

That's all for this post, 
Brian Beamish FCSI
The Canadian Rational Investor
the_rational_investor@yahoo.com
http://www.therationalinvestor.ca
http://crisdaytrading.blogspot.ca/

July, 2013 L&B $30k combine trading plan:
Monday July 8th:
Today was a productive day (3/3) for +17.5 ticks net. For those interested, here is a picture of a bullish AB=CD Harmonic Price pattern and the 'bot' trade entry setup: