Sunday, October 28, 2012

CLZ12 - Update for the week of October 26th, 2012

Welcome back to CRI's ongoing Crude Oil Day Trading Blog.
Price analysis you see is CLZ12, for the week of October 26th, 2012:


Market Overview:  As has been the case for several weeks now, the market is building up to the all important US Presidential election in early November. Energy prices have eased appreciably of late in the face of rising domestic inventories, easing mid-east tensions, reduced global growth prospects and maybe a little 'tinkering' (by those in power wishing to stay in power) too. Regardless, prices are currently falling and well established trends suggest lower rather than higher prices ought to be expected over the short term. Having said that, prices have fallen quit a bit of late suggesting some sort of 'dead-cat' bounce back into resistance isn't out of the question either.

Weekly highlight: The failure of 90.27 painted a rather bleak outlook for price and indeed it fell. The market has found some support near the $85.00 area and may be basing but that seems a little early to suppose give the well defined daily/weekly bearish ab=cd price patterns, the dramatic reversal in CoT Institutional holdings, the 'bottomy' action in the US Dollar index and the proximity of the US Presidential elections. 

Trading Strategy (1 week): Daily and weekly ab=cd price patterns suggest the market wants to revist the low $80 area. Additionally, there is a rather significant daily price gap that ought to be filled near $79.47. Having said that, the market is oversold in the short term and my hunch is we may spend a good portion of the coming week back-filling. a 50% retracement of last week's sell-off could easily bring price back into the $90.00 area and that shall be my general target going forward - as long as $84.94 is not broken. The current 60M/4hr OTE Short SS is near $91.00. Should we get a violent rally back up into this area I shall be looking to short in earnest once again.


Mental State Review: last week's post, "My confidence is very high IF I am patient and wait for set ups. My problem is impatience right now. My goal for this coming week is to do less trading and try to only take trades based on my plan - regardless how few they may be." I did exactly this to begin the week (and posted a great OTE short to start the week last Monday) but found that by time Friday rolled around I was over trading (out of inpatients and boredom) once again. I now recognize this and will work on measures to keep trading down as the week progresses.
 
Trading Plan for this coming week: Watching for and using 'OTE' setups to identify buying and selling opportunities at key support/resistance levels on the 60m/4hour charts. Once trade zones are entered, drill down to 5m/15m for OTE entry points (coupled with momentum/volume divergences) and follow the trade process.
Picture everyday my ideal trade....looking for momentum divergences at or near OTE zones on 60M/4hr charts; tight reversal, clean additional OTE entry signals on shorter time frames where tgt is +.42 and stop is -.21....I have come to see that profitable day traders do not always have to trade....so there simply is no hurry. Trades they do enter are ideally looking for a 'range extension' in the opposite direction. While trading 1 lots does limit this participation, consistently shooting for +41 tick trades (while risking $215/trade) seems like a realistic target/goal for the $30,000 ($500/day max risk) combine account.

Trade Process: Once 60m/4hour OTE sweet spots are entered and market has confirmed vol/mom divergence, b/s 1 aoco (-.21/+.41) at 5m OTE entry levels where prev. peak (+/-.10) is no greater than 21 ticks....Either 2 immediate losses ($-430) or three wrong trades in a row (-$645.00) equates to end of day. Gains of more than $1000/day equates to end of day - and a big pat on the back.


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/

No comments:

Post a Comment