Wednesday, June 22, 2011

WTI Crude Oil Update 6:54 PM CST 6/22

(Chart 1 - Crude Daily Chart Zoom)

92 proved to be very strong support on a closing basis a few days ago. It is the bottom of the current trading range (92.25-95.25) and also coincided then with the low of the current magenta bearish channel crude is currently trapped in.

Where do we go from here is the obvious and important question? Let me start by saying that anything you do in crude at these levels should be kept light and your fades should be wide.

95.25 is the obvious resistance, as we are trapped in this trading range. However, I feel we will breakout a bit to the upside and challenge the midpoint of this channel (dotted magenta line).

I feel anything from 95.25 to this midpoint line will be a good sell for a move first to 93.75, and then an eventual retest of the 92 level. If you find yourself selling at around 97 (where the midpoint line is currently), then consider covering some back at 95.25, as this may be a pullback before we make a run at 100....

I am indecisive because of the hammer candle we put in at the 92 lows and what support it came off of. I feel this rally can be sold. However, I am cautious as that candle on the low of a down move can cause a sharp reversal, and crude always likes to move.

The point at where I begin to seriously doubt the short case is when we close above the midpoint line.


To the left is a 4 hour chart of the GBP/NZD, and it looks like for the second time in the last few days the pair has broken the previous low mark @1.9857. I don't see a whole lot of setups yet for this pair, but I would try to be patient and sell a retest of the trendline shown in yellow, or play it as a breakout and sell it now, but neither option do I love. In the end I feel there is nothing saying that this pair isnt heading lower in the intermediate to long term future but I dont see a good entry spot for a short term trade.

SnP Resistance Overhead. 6:09 PM CST 6/22

(Chart 1 Daily SnP future)

Sandwich did a post not too long ago here on the SnP as well, but I wanted to get my 2 cents in.

1279.5-1299 is the "trading zone" in MML theory. Essentially, it is hard for price to get in there, and once it is in there for 5 or so days it is hard to get out.

I believe that shorting this area for a move down to 1250 (whose speed is governed by the slope of the bottom of the magenta trend channel) will be a good trade.

A close with any conviction over 1300, and I begin to get bullish however.

Starbucks (SBUX) Straddle update

As an update to a possible trade I had looked at in a previous post, it seems as though Starbucks is starting to test its upper threshold here, as you can see its broken out of the triangle (shown in yellow) that it had been forming and the reason for the trade, and now looks to get out of its regression channel (shown in purple). Should it continue up, the last test will ultimately be its recent highs at 38.21. Right now with where I got into this trade it is up approximately 4% and at this point going to hope we can continue this uptrend even with stocks looking like they might be turning.

Silver (SI) possible buy opportunity 6/22

To the left is an hourly chart of Silver, and there is quite a bit drawn on here. First we have the retracement (in yellow) from its peak in late may (@38.845) to its recent low (@34.4) and you can see we have broken into the first level (@36.098) . Secondly we have the retracement (in green) from the sell off just recently in mid june going to its ultimate lows, you can see we have broken all the way above this retracement and are still holding the 50% line at 36.137. I've also placed a linear regression channel (in purple) of this recent up move. It looks like we are headed towards a lot of support around 36.1, and with us in this purple uptrend channel I feel this could be a good short term buy up to the upper 36 to 37 level. I will be looking for a hammer or engulfing pattern off that level for an entry tomorrow.

EUR/USD In a retracement channel 6/22

It looks like the building divergence we had seen in the eur/usd has finally led to a sell off in the afternoon hours of today as we break to the lower part of the retracement channel shown in yellow around 1.431. So while over the last few days we've been in a minor up trend, I think we have held the intermediate term downtrend and we'll see if the short term trend can be broken by getting out of this channel and headed back towards new relative lows at 1.4072.

S&P (ES) Muddles around resistance, holds 6/22

The S&P hourly chart on the left has been a little worrisome for anyone short the last couple days, and as I had warned in a post a few days ago I thought that we would ultimately reach 1288-1290 before having a chance to head back down. So after hovering around this resistance which was tested a couple other times, but not at all since marking its relative low at 1252.25, we finally start to sell off and seem to have held it. If you had shorted at this level I think it can be held for more opportunity, but if we head back up to 1288-1290 tomorrow I would be weary and ready to get out.

Dolemite waves the white flag...

Well ladies and gents, this is how it goes
I've always been a much better analyst than trader.

After being so so right last week and murdering it on every turn of the market, this week has been a total 180. A good trader would've maximized last week and would've cut all the positions I had this week off days ago.

I however, got out consistently early last week when I was right, and held on to and added to everything I was wrong on this week.

Now I am flat all my positions, all of my profits from last week, and full of self loathing..... ah the joys of trading ;)

Good luck out there and I say this to you all as a lesson of what can happen when risk and money management are blocked out by arrogance and greed. This is the number one rule of trading, one I have never been able to get down.......