Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
By term structure i mean it need to move back from contango to backwardation. As far as technical evidence i am looking for that Crude Oil has put a bottom in- all CL has to do rip 300 ticks up and never visit that area again- whether it's $44, 40 or whatever it may be. So far, CL rips up and then gives up everything within same day or within next day or two. This kind of behavior is typical when something is extremely bearish. We get strongest rips up - short squeze etc- within a bearish trend and then so called bullish candles, price action etc disappears.
My posts are not meant to give financial advice neither do they imply that my method is special. "THIS IS WHAT I COULD BE IF I HAD A TOTALLY CARE FREE STATE OF MIND DURING TRADING" Mark Douglas.
1. I have spent 40 minutes on Google trying to find an inverse 1x inverse ETF on WTI crude oil, any recommendations.
2. My price projection for WTI Crude is down to 26 or 28 within two to two and a half months. How best to trade that??
I was just thinking a short EFT 1x, which apparently I am having great difficulty in finding.
3. One thing I am closely examining on the technical analysis side is the angle of the drop in oil price in 2008, If one looks at that on a monthly chart. We have six candlesticks down. Until bottom was hit. Losing and average of about 14 points a month. On this downturn we have about 3 candlesticks down, losing about 9 or 10 points a month. I have a price projection of 26. Now, I need someone here better than math than I am. Should I be looking at this chart arithmetically or in logarithm. The one major difference here between the two is that in 2008 we hit a peak that we declined from. On this downturn, we have a breakdown though support.
Also worthy of note in the 2008 chart is the angle of ascension, once we hit bottom from there. I would assume once this downturn has hit it's bottom WTI crude would do a similar move up.
You can also look at option strategies against USO, as simple as buying a put, selling (writing) a call, or the various bear vertical spread strategies.
A bigger difference today compared to 2008 is the US Dollar. You really need to be comparing the US Dollar against Crude Oil to understand what is happening today. The trade your considering is also a trade on the future price of the US Dollar against the Yen and Euro. Currently we have collapsing global demand, primarily asia, combined with a strong uptrend in the US Dollar. In 2008, we had steady to increasing global demand within an environment of a weak dollar policy in effect whereby the brief dollar rally mid-year quickly reversed back to close the year back below long term support at the 80 level, and thereby allowing oil to reverse trend and rocket higher. So, with that backdrop, unless the dollar trend reverses course, the best oil will be able to do is find a low somewhere and drift sideways in a trading range. With that said, we are now within the window of time that starts a bullish seasonal period for oil, (from mid-January to late April).
all commodity prices were were high for the past 7 years because the dollar was weak. and, now the dollar is back to more normal levels, and commodity prices have adjusted. however, the demand side of the equation is only one part of the story; and in fact, only 44% of the drop in oil prices is attributable to broader demand factors. there has also been a 65% surge in u.s. crude production in the past 4 years, which was driven by new drilling technologies. eventually, falling oil prices will have the effect of reducing supply, and stimulating demand, and oil prices will rebound. therefore, it's wrong to think this is primarily a demand side problem, especially, if you factor in the the saudi's actions. this is an important distinction, because lower oil prices, that result from increased supplies, will likely be supportive of future economic growth.