Update for the week of August 23rd, 2013

Welcome back to CRI's ongoing Crude Oil Day Trading Blog.

The first picture is the daily, weekly and 120 minute charts with Crude Oil's term structure and CoT summary for the week of August 16th, 2013. Each trading day (time permitting) a 15 minute chart is added and trades for that day are reviewed:

 

Market Overview: Late summer, 2013 is passing with little fan-fare. Stocks have cooled, bonds too, while the currency markets are relatively stable at the moment. Interestingly, over the course of the summer, only the Euro has established a floor to work with vs. the greenback, and that floor is tenuous at best. Considering the significant US political 'showdown dejour' coming in mid September, growth may come into question and a resumption of the 'fear' trade may not be off the table as of yet. Many assets are now no longer 'oversold' and one can really feel the low volatility summer atmosphere. Consider too September's historically poor performance and one has to give some serious thought to either hedging or even getting short.
 
Weekly highlight: As had been anticipated, prices bounced nicely off the 2 hour OTE long Sweet Spot (103.65) and rallied nicely for the remainder of the week. Indeed, we finished so strong one has to wonder if Crude prices are not finished moving higher just yet. In my daily 15m USO commentary I suggested upside targets off the bottoming action had been hit and even exceeded. Additionally, short term momentum studies looked a little suspect heading into the weekend. So my expectations is that we will need a bit of trading to clean up the momentum indicators and only after a day or two of consolidation should we get an idea of weather or not we move higher yet. Because of the significant holiday coming, my hunch is we drift up into resistance (and maybe even hit some of the projected upside targets previously posted) into the September 12th pivot and then being our seasonal correction in earnest.

Personal journal: This past week I was able to reign myself in and get back on track. Because of the size of my account, risk must be less than 14 ticks per trade. And because of the specific setup I trade with TsT, initial rally/selloff moves (that being the point A to point B of the ab=cd price pattern) can not be more than 50 ticks. If that move is greater than 50 ticks then I must simply watch the whole pattern go by. Because of this realization, I found I was far less eager to take positions and was able to manage myself and my actions more appropriately over the course of the week. Irrespective of these limitations, the market did afford opportunities. Monday and Tuesday were tough as personal loss levels were hit (-25 ticks per day). Conversely, on Thursday I was able to book several winning trades and finish with a +90 tick day. The net balance was a marginally profitable week (roughly +30 ticks) and a renued confidence in both myself and the model - if followed appropriately. Indeed, the model does work, it's just a question of personal patients in letting me let the market tell me when to participate. Another week of paper trading like this and I feel I will be ready to switch back to 'real' trading.

Trading Plan: Continue to trade in the live/prac account as if it were real money. Do not even attempt a 'real' trade until at least three days of consistently taking 'valid' setups is established. I know for sure this entire week shall be 'practice' trading, the question for me right now is, can I get my discipline back for the post Labour Day market.

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/

August, 2013 $30k 'live' trading plan: