CLG13 - Update for the week of December 24th through December 28th, 2012

Welcome back to CRI's ongoing Crude Oil Day Trading Blog.
Price analysis you see (first chart & commentary) is CLG13, for the week of Dec. 14th - 21st, 2012. 
Each trading day a 15 minute chart is added and trades for that day are analyzed:

Market Overview: In polar opposite to the previous week's price action, this past week saw Crude oil prices generally work their way higher. The previously noted $87.50 was breached early in Sunday evening's session and price continued to grind higher into the trading range breakout target ($90.65) area. Following that, price quickly retraced 50% of the up move through late Thursday and into Friday (testing the $88.20 breakout level again) and then finished the week on an bounce. With little new news regarding the pending 'fiscal cliff' it is not surprising to see the market basically move sideways until we some sort of resolution. Having said that, it is interesting to see price registered a weekly (continuous contract) double bottom with the move through $90.33. Considering too the overly bullish stance of Institutions - one ought to expect a bit of bullishness. How much of a 'bit' is the 64k question at the moment.

Weekly highlight: Considering the holiday atmosphere, it was not surprising to see many of the regular 'order flow' setups did not work. Opening range trades went for a fraction of the distance they usually do. The action itself seemed very suspicious too in that it was only through the range trade time frames (for me in particular the NYPit ORT 6AM pst & the 7RT 7AM pst) we saw violent doji candles. In essence, pit traders would run the market one way (to trip buy/sell on stop orders) and then instantly run the market the other way about 20 ticks to try and flush out the weak hands. It worked on me and as a result I started each trading day this week with losses - very frustrating.

Trading Strategy (1 week): Same as previous week...Because of the holiday atmosphere, I expect market participation to wane and price action to get very choppy. If I had my druthers, I would simply take the period from December 15th to January 1st off. Nonetheless, I will be at my post and making notations of trade setups through this year's holiday season. I just won't be surprised to see performance of normally predictable setups not work as well. My theme of late is simply to continue doing more of what works and less of what doesn't. The time range trades seem to work well with the type of trader I am. To that end my goal for this coming week is to have a notation for both the NY Pit ORT and the 7RT trades every day. I will be doing them through the practice account as I don't want to start a new combine until the new year.

Mental State Review: I feel very positive about trading and look forward to a long and substantive career trading commodity futures. It took me several months to get 'up-to-speed' and to really figure out my 'edge'. At this point I have a very consistent daily trading plan with specific trade setups to watch for. Additionally, I have moved to just trading off the 15m chart (with referral to the 1hr/4hr/Daily charts for levels). I find that if I concentrate on just one time frame I can identify the setup and don't get excited about the trade (while watching the 5m chart I found I would get excited/nervous about what it was telling me and would end up exiting trades far too early). Friday's substantial hold (bought at $88.39) was a trade I really liked doing. There was a clean 15m trade-able BoT bottom and I went for it. The market at no point registered a 15m sell so I just held on to the position. As you can see (please see last week's blog entry for Friday's 15m chart), that analysis was correct and the one trade made up for 4 failed ORT trades from earlier in the day.

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/