Update for the week of May 17th, 2013

Welcome back to CRI's ongoing Crude Oil Day Trading Blog.  Price analysis you see (first chart & commentary) is CLN3, for the week of May 17th, 2013. Each trading day (time permitting) a 15 minute chart is added and trades for that day are analyzed:

 

(courtesy of http://www.sdfanalytics.com/)

Market Overview: 05/17/13: The recent bullish reversal in the US Dollar index continued this past week and has now confirmed (in my mind) the bullish scenario laid out in previous blog posts. With both ECB & BOJ on aggressive easing programs, the North American economy looks to be relatively attractive and indeed money is pouring into US dollar denominated assets. Of particular note, the Aussie dollar is now racing lower in a bid to play catch-up to the Yen. Additionally, from a macro perspective, things are taking a hawkish turn in Syria suggesting a global war premium is being built back into the market, something we haven\'t seen for some time. 

Weekly highlight: This past week was tough because of roll. We are now into the July contract and daily price objectives near $99 still remain in place. VolProfile data suggests peak interest near 94.10 & 95.10 with a significant valley around $94.50 which happens to be right around the 2 hour 50% level. Considering seasonality, a period of consolidation wouldn't be too out of the question and considering too the significant bullish breakout in the US Dollar index, my upside expectations will be limited over the coming weeks.

Trading Plan: I got away from my trading plan on Tues. & Wed. and it cost me several hundred dollars. I understand that I just simply can't take a position in Crude unless I see a valid setup. I got impatient and ripped apart. To that end, I will try and refocus my attentions to only take valid trading plan setups.

Setup Managmenet

1. Price must have entered a valid 1/4 hour OTE long/short sweet spot (70.5% retrace of primary move)

2. Watch for 15m momentum confirmation of bottom/top & 15m OTE trade location.

3. Move to 5m and identify time zone trade locations and levels.

4. Move to 3m to find VolProfile/Trendline/Momentum/Candle trade locations and only enter trade if target is at least three times risk on trade.

Trade Execution

1. Enter order on AOCO basis (-15/+45)

2. Once order entered leave to fruition.

Risk / Reward management

1. I can only move my stop once +30 (or twice what I am willing to risk) has been hit

2. I must force myself to consider every time zone trade location as a possible trade opportunity (5AM pst, 6AM pst, 7AM pst, 8:30AM pst, 11:30AM pst)  

3. Three strikes and you are out (-465 max loss on day) 

4. Daily goal is +45 ticks (or +$450 profit on 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/