CLG13 - Update for the week of Feb. 8th to Feb. 15th, 2013

Welcome back to CRI's ongoing Crude Oil Day Trading Blog.
We are within official 'roll' period for day traders - Now in March, 2013 contract (CLH13) will be moving to April, 2013 Contract (CLJ13) this week
Price analysis you see (first chart & commentary) is CLH13, for the week of Feb. 8th - 15th, 2013.
Each trading day (time permitting) a 15 minute chart is added and trades for that day are analyzed:

Market Overview: While pre occupied on another project I have admittedly let my futures trading and this blog take a back seat. Interestingly, I am on the last day of my most recent combine and have (in very typical fashion) about a 1% return on assets over the 10 day period. As long as I continue to post positive trade balances, the good people at TopStepTrader will let me continue to roll my combines at no additional charge. Now that the project has been basically finished, I can once again concentrate on this (and my other free blogs) in earnest once again. As was pointed out in today's CTS, it seems to me the market is in the process of shifting money out of Japan and back into Europe. World economies appear to be on the mend as long term interest rates have begun to move higher of late with surging stock markets. As pointed out in my most recent SPY blog entry, one shouldn't get in the way of bull markets as you just might get run over. With that in mind, there really is no telling where/when the market will run out of steam but considering the Yen has now entered an oversold condition on a weekly basis (a rare occurrence in itself) some sort of short term reversal shouldn't be too unexpected.

Weekly highlight: Crude oil prices have basically gone sideways since the end of January in what can currently be only considered a range bound market. Is this a mid-point consolidation (suggesting much higher prices) or the beginnings of a medium term top (suggesting lower prices)? The 1st 2wks Q1'13 Study suggested energy would see net inflows for the quarter and the January Barometer suggested the market should have a positive tone to 2013. But neither of those studies guarantees a straight line move up or down. Until this range is broken $95 to 98 in earnest, one has no choice but to look to either buy or sell extreme range touches. !5 minute turns near $95 ought to be bought while 15m turns near $97.50 ought to be sold.
 
Trading Strategy (1 week): BoT (Break out Trades) I am very comfortable working with my 15m charts and playing double bottoms & tops for moves to either 50% levels or OTE sweet spots. Ideally BoT entries come at or near hourly OTE ss levels. The key with BoT's of late seems to be to only enter a position on a touch of the 13ema following the double top/bottom. Most trades take less than 10 ticks of heat and easily move +30 ticks in the trend's favor. So with this in mind, my trading strategy is to concentrate on BoT entries at or near hourly/4hr OTE levels. I want to focus on 5:30AM to 8:30AM trading window and take every setup that occurs during this window of time. That is my #1 goal for this coming week.
 
Mental State Review: I was relieved to finally finish the project that took me away from the market for the better part of a month. I feel refreshed and focused on the task at hand. I have one day remaining on my current $30k combine and shall finish that Tuesday (Monday is a US holiday) and then start in on a new one immediately after. 

Trading Plan:
1. BoT (momentum): 
Determine both upper and lower OTE ss entry points on higher time frame (Daily/4Hour/1Hour charts). Find price breakout (typically double bottom/top) confirmed by momentum & volume on 15 minute chart at or near these higher time frame OTE ss entry points. Calculate realistic targets (50%-70.5% retrace into VProf 'Claws'/ma's/gaps on higher time frames). Monitor 13ema on 15 minute chart for entry levels once the breakout has occurred. Look to enter with the prevailing trend (BoT) on touches of the 13ema. Regardless of how long it takes, I can only take a BoT position on that condition. All orders should be entered as AOCO (-15/+41). I can only consider moving the actual stop at +30 (or opposing Keltner band touch). Goal for the week is to 'try' 1 trade per day that meets BoT criteria.

2. ORT & 7RT (time frame range trades):
I will prepare as usual for these daily setups. After about a month of 'forcing' myself to take every setup I have come to appreciate the model, its potential, and its risks. As mentioned above, I will continue to follow the model and indeed take positions, but not if they argue with either a significant counter OTE ss level (meaning the market has moved to a dramatic extreme) or if it is in the face of a prevailing BoT.  

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/