WTI Crude (CL) Futures Market, and What is Happening. BS Debunked

Dont you need a commodities broker to trade options on a futures contract?

that's why i bought jan3 as well. I made almost 100% on these calls. this can still go to 88-90

to answer your question, i felt like we hit an intermediate bottom. That would last for several months, in hindsight i probably should have bought some July's, but i wasn't too confident in my timing, i thought I could be early by a month or two. In some EW counts wave 3 should have ended and wave 4 is jjust begining in CL.  i did well in the jan 3 84's so I am happy with it. good luck to your trading bud

Yes....a futures account with approval for options is needed.

Agree....there is no doubt that the Crude selloff is market manipulation. The institutional cash is marching lockstep with one another towards the bear. At best that is collusion or old school price fixing......

A nearly 60% depreciation of an energy over the course of 7 months? Also, I haven't mentioned it much, but take a look at the prices of the Natural Gas futures contracts.....in the dead of north American winter?

Guys like this are whom the big boys are trying to eliminate:

https://finance.yahoo.com/news/oil-tycoon-harold-hamm-lost-110300253.html

 I like the options plays, as I do not see energy staying artificially low forever......there will be a consolidation of the frack guys, and then a return to the norm; only question is just how many months of sub 50$ crude it will take to bury the undoubtedly leveraged "working class" operations.  My guess is one or two....if we can get sub 50$ crude until the end of January, then look out wildcatters.

 

 

45.96 low of day.......45.00 should be in play soon.

Lets put it this way, I work with a Frac crew out in the Bakken and was just told 3 days ago that we have contracts to work on wells up until April and then it is a world of unknown. I just figured I would put in my 2 cents. 

down to 38$ she goes

45--->38

happy hunting... come summer it will be around 42-45 again.

Thanks for weighing in....I worked over there 18 months ago; I was curious to hear exactly what the situation is as of right now.

Well, we did get a check below 45 even earlier this week.....and now it may be time to go long.

Crude showed strength above yesterday's high; but the real story was today's volume....the volume was staggering.....462,515 contracts traded hands. That is a monstrous amount of trading, even for inventory day.

This could be the point where the institutions step in and jam this baby back north of 50 bucks to stay.  The rest of January will be hugely important in regards to where we trade for the rest of the year.  If we close under 50 bucks at the end of Jan (when we roll to the March contract) then we may actually see depressed energy prices until the end of May.....if crude rallies and closes the month over 50 bucks then the scenario of 75$ crude by the end of May is extremely probable.

Personally, I am still partial to testing the 40-44 dollar range, and trading down there for a period of time, before the permanent march back towards triple digits......but I am not stupid...even though Crude finished up only .04 on the day, the amount of volume that came in and launched price to the bull from yesterday's high gives me reason to pause on the selling for the time being.

There are buyers in those weeds....and lots of them.

Yeah that power lift at the end of the day might be a near-term bottom, but lets see if it is not the case and if that was not a bottom then we are going under 40..

Anyone have an explanation for that huge pop. Would this be a fund calling a bottom and taking a big position?

Yesterday I bought into energy ETFs XEG.TO and CLO.TO for a total of $30K.

With oil as beat up as it is, I just can't see it going much lower (or even staying this low for long).  Of course there are lots of dynamics at play, but at the end of the day oil is still a non-renewable resource. I don't see how it would be possible for oil remain below $50 for more than a year.

If the skies fall and oil slips and holds at $30 for 10 years+ I'll have more to worry about than $30K.  I don't see Canada (Alberta specifically) becoming akin to a 3rd world country...and I am willing to bet on it.

It could be a short squeeze as it keeps going up in extended trading..

It could be some institutional money coming in and making a longer term play; not ruling that out.  I would be surprised to see them putting money into the February contract this close to expiration; that is a short term play, I would be looking for volumes flowing into the March, April, and May futures contracts.

The scenario that I am partial to is the following: price traded above the previous session high at 12:11 mountain time.....upon the price being hit, 46.80, there was a tremendous amount of volume, most all was buying.  You also had a key # of 47.00 in the vicinity; there were huge volumes going long at 47.01. It is also important to note the time of day; from 12-12:30 mountain time is the old pit close. We see increased volumes during this period, and more specifically, from 12:25-12:30 every day....usually traders either covering their day positions, and scalpers playing the volumes. 

So, with the contributing factors outlined above, we had a scenario that brought a tremendous amount of buying into the market.....which in turn keyed the black box momentum algorithms to kick in, and the high frequency boys to trade the momentum to the bull, and drive the price higher and higher.

I am inclined to think that this was the scenario that generated the pop.

We tested above 50.00 today, with tremendous vigor, then retreated hard on the pit open......sitting tight for the moment, waiting for confirmation over 50.....very early in the game for this year, but many guys are looking to go long, including myself.

As always, have to wait and see...first this week, and the rest of the month.

Best of luck with your trade. I do not know much about ETF's or equities, but I would think if you can hold out for 10 years then it will be more a question of what levels you want to take profits, and what your tax liabilities will be.

Huge thanks to wallstreetcappers to making me second guess myself and do more research to conclude that we are not at bottom yet. I didn't like how SU was up strong in pre-market and fell as the market opened.

I sold all $30K of ETFs first thing this morning when my holdings were up another 1%...and I made $900 profit in those 2 days.  If I hadn't sold I would have given back $670 of my profits.

Now I can sit and wait for a better entry point.

One thing that gives me a bullish bias and it is a bias is that I believe in the USA. This has been the basis for my trading the past several years, until the trend changes I still and will have this bias, which I have mentioned in the past. I have travelled around the world and trust me you don't want to live anywhere else. I strictly day trade, and make my living doing this. On to my point, US shale industry is real growth and provides a bunch of jobs. The US of A will not allow jobs/economy to be hampered/ frack ing is here to stay. Maybe some high yield debt/risk taking has to be cleansed before we get a rip up. But 2015 will be the energy sectors year, this is my opinion. Money managers all over the world are looking at the energy/oil sector and are looking for value/distressed assets. I am doing the same. I own a bunch of eog in low 80's. Leaps and common. I trimmed some because why not take some profit, but I am holding a bunch. I also own a bunch of PGH in the mid to high 2's. Trimming half above 3.20 and holding the rest. Great divy's that will get trimmed in the coming quarter. Good luck with whatever you all are doing. I will look to add other names to my portfolio and will keep you all posted.

Not much shaking here this week so far.......trading around 48.00 per barrel.

The strong down pressure that has dominated the last 6 months looks to be taking a break......sub 50$ crude is continuing, but the jam to the downside is missing.

Still looking for us to consolidate above 50$ for confirmation that the bottom may be in....usually when you see analysts calling for oil to hit extreme lows, down in the 30's, then there is a good chance that we may have seen a bottom with the test under 45.00$....those guys are a day late and a dollar short, and only trying to make a name for themselves.

Trend to the bear is over for now, and the consolidation period has begun. Looking for us to trade sideways between 50 and 40 for an extended period of time, with the eventual rise taking place this spring.

Calling an exact bottom is a tricky thing.......right now May 2016 Call options with a strike price of 52.00 are going for $9,010 bucks (9.01$ per barrel, a contract is for 1000 barrels) per contract. 

It is tempting to go in hard and buy a block of these things and play Crude to return to 90-100$ per barrel within 15 months.....the potential of being able to rake 30$ + per barrel could be a once in a decade type of trade. 

So, for now we are in a holding pattern.....

https://www.msn.com/en-us/money/markets/crude-collapse-has-investors-braced-for-%e2%80%9980s-like-oil-casualties/ar-AA8pvfK

The part about the financing pressure being put on "high debt" companies sounds familiar.

I went through the same type of garbage during the housing bust of 08-10.....one day the banks were throwing money at you to build homes and invest in real estate, and the next day there was no financing to do anything....build, buy or refi....nothing.

I feel for some of these mom and pop drillers that depend on their revolving lines of credit in order to operate.  Most likely it is curtains for them.

The Euro FX (6E) is in an absolute free fall.........we are seeing historical lows in the Euro...

US dollar index (DX) is banging higher...we are going to be assured inflation talk and possible rate hikes this year.

Crude is trading sideways, printing 46.75 as of writing....abnormal day today, trading a megaphone on the daily, above yesterday's highs, and below yesterday's lows. Chop.

Funny, my broker sent an email out to clients yesterday evening and raised the intraday trading margins on the Euro FX to $3000 per contract.....up from 500$.....even the brokers knew that the institutions were going to close out of Euros today pending a European news release, (ECB Bank Rate Decision)

This is fascinating stuff......I have been trading futures nearly everyday for the last five years, and I can tell you that the raising of intraday margins like that preceding a news release speaks volumes to just how shaky some of these firms really are.....

Not historic lows at all..

Maybe not all time historic lows, but the Euro trading near 1.1367 brings in some of the lowest levels we have seen in 10 years.

That is an interesting take on the inflation question.  I would be inclined to take an opposing viewpoint, arguing that the low energy costs are likely to lead to our Dow clipping the huge psyche level of 20000 in a relatively short order.  Again, I would argue that it is not the numbers which will prompt the fed to move, but the rapid pace in which we reach them.....the dollar index has blown up, and I haven't talked much about it, but the gold market is showing signs of life, trading around the 1300 level.

IMO the DX moving towards 1 even coupled with gold rallying, shed some light on where the money is going.....you may be right about the deflationary scenario, but be that as it may, liquidities are being shifted into the US economy right now; dog with the least fleas, and many guys are tired of getting banged up in China and Brazil.

With a raging Dow coupled with low energy costs, we should see a bump in the housing market. As soon as we see a bump of value in real estate, in come the rate hikes.......

oil tankers are just chilln. lol

It is getting to be time to pull the trigger on the call options.

The outright March CL contract tested the 44 even level, with a low of 44.08 last session. We are seeing consistent selling, but in a grinding fashion...the break away trend days to the bear have settled in a bit, and nearly every technical number is attracting buyers....heck of a bounce today on the WTI inventories....and then a grinding selloff for the rest of the pit day.

My long term overall call of a low is  the 44.00-40.00 range... I would not be surprised at all to see crude test 39.99, but I would be shocked to see CL trade in the 30's for a long period of time.

This week looks to be the week we pierce 44.00 even; I will be throwing down on the options plays very soon.

looking at adding OAS over a sustained break of $13.80. I haven't been around but fyi some EW counts have the EURO headed to .80. EOG still holding up really well off of $82-$83 bottom.Still adding to PGH. They cut their divy as expected but still great. Alright good luck all!!!