Crude oil dropped for a third day in New York on speculation the economic recovery is not proceeding fast enough to rein in excessive fuel supplies.
The Organization of Petroleum Exporting Countries’ oil output increased for the third time in four months in July, led by gains in Iraq, a Bloomberg News survey showed. Futures yesterday declined to a one-week low after U.S. crude imports jumped to the highest level in almost four years, leading to an unexpected increase in commercially held inventories.
“There’s a fear of a slowdown in economic growth which will go on for the next few weeks,” said Gerrit Zambo, a trader at Bayerische Landesbank in Munich. “Investors are likely to be disappointed with the economic data and oil will come down a bit. It’s more likely to go below $70 than above $80.”
Crude for September delivery declined as much as 48 cents, or 0.6 percent, to $76.51 a barrel, in electronic trading on the New York Mercantile Exchange, and traded for $76.73 as of 1:08 p.m. London time. Yesterday, it fell to $76.99, the lowest settlement since July 21. Brent crude for September settlement on the London-based ICE Futures Europe exchange was down 19 cents at $75.87.
The Energy Department report showed crude supplies climbed 7.31 million barrels to 360.8 million in the week ended July 23, the biggest increase since March 19.
Thursday, July 29, 2010
Sunday, July 18, 2010
70 Tick Crude Oil Trade
Check out this amazing futures trade we did. 70 ticks on a great reversal after a breakout long.
Saturday, July 17, 2010
Crude Oil Break Out Trade
Here is a video from a crude oil trade we were able to get in on early and make large profit.
We saw some great price action to set up this futures trade and measured the move right to the end of the trade for a clean exit
We saw some great price action to set up this futures trade and measured the move right to the end of the trade for a clean exit
Thursday, July 15, 2010
As World Cup ends, Europe's stress tests loom
-- The unique ability of sports to bring people together and make them forget -- at least for a spell -- their troubles with each other is never more on display than during the World Cup soccer tournament every four years -- even more so than the Olympics. And this summer has been no exception.
The last four weeks marked a welcome relief from the climate of fear that gripped world markets in April and May, as names like Villa, Sneijder, Kaka, and Muller rose to prominence in the headlines and action photos, replacing the tired old shots of names like Trichet, Blankfein, Geithner, or Hayward, entering hearing rooms or press conferences. People gathered throughout Europe -- from the Villa Borghese Park in Rome to the Santiago Bernabeu stadium in Madrid -- not to light fires and protest the dreaded "austerity" measures from their governments, but to watch "the football" on big screen televisions together. Predictably, the games caused more heartbreak and controversy than joy. After all, 31 countries have to lose before one can win it all.
Markets reflect public perception and were quick to fall in step with the sports-induced lull. The plunging euro /quotes/comstock/21o!x:seurusd (CUR_EURUSD 1.2922, -0.0005, -0.0387%) recovered a bit against the dollar during the tournament. So did the British pound /quotes/comstock/21o!x:sgbpusd (CUR_GBPUSD 1.5436, -0.0004, -0.0259%) . Credit markets were calm while stocks in Europe -- and indeed globally -- were flat, rising earlier in the tournament then falling back to end a terrible quarter weaker. But lack of fear and nervousness about China's economy or the future of the euro helped pave the way for some feel good stories that have the bulls rearing their bruised heads again.
Europe's banks survived a deadline for repaying short-term loans to the European Central Bank last week, and borrowed far less than expected going forward. Agricultural Bank of China got its massive initial public offering launched this week amid high hopes from investors tied to the China growth story. And bankers from London to New York took advantage of the break in hostilities toward their industries to make a series of bold, new money grabs. Three ex-Goldman Sachs bankers in London priced a money-losing online grocery service called Ocado Ltd. this week, and hope to make away with some 90 million pounds ($136 million) in an initial public offering before investors realize the company is simply Webvan with a British accent.
And two of the co-founders of Kohlberg Kravis Roberts -- the original barbarians at the gates -- hope to throw open the doors and make a dash for it in a public stock offering to investors next week, a la Blackstone Group's /quotes/comstock/13*!bx/quotes/nls/bx (BX 10.56, +0.28, +2.72%) success.
But the stress of the last six months in global markets, particularly in Europe, is set to resume almost immediately after the final whistle at Sunday's World Cup final in South Africa. Earnings season in the U.S and in Europe begins on Monday, and with it expectations for some dire forecasts on business conditions for the rest of the year. Oil giant BP remains in critical condition as investors bet heavily on its future ahead of its earnings at the end of the month. But the most important event for the market right now at least is the coming stress tests for banks in Europe, results of which are set to be announced in about two weeks.
There is great concern that some of the 100 or so banks tested -- particularly the regional German landesbanks or the Spanish cajas -- will reveal enough weakness to trigger more concerns about larger bailouts and sovereign debt defaults in places like Greece, Portugal, and Spain. These concerns are likely unfounded. Anybody that remembers the U.S. stress tests on banks last year will recall that they were designed by the Treasury specifically not to add to the stress levels of investors. Indeed, weeks of concern about the U.S. stress tests ended with a rally in the market after Wall Street realized the last thing the Treasury was going to do was announce a major fault line in the banking system. Expect the ECB to finesse the European stress tests in the same way, causing a rally in stocks and bonds in Europe later this month.
But after that artificial event, there is indeed real reason for concern in Europe. Indeed, my personal stress tests revealed beneath the veneer of World Cup fever a deep fear about the economic future in specific countries. In Spain, a series of transportation strikes in Madrid layered on pain to a population suffering 20% unemployment, and facing a restructuring of its financial services system, with thousands of more job losses. In Italy, residents spoke of tourism being down noticeably and of concern that the contagion in other parts of Southern Europe could spread there. In the U.K., financial engine to Europe if not the world, the new government's emergency budget has staved off debt concerns for now. But nobody is under the illusion about the challenges that Prime Minister David Cameron's new coalition government faces in turning the economy around while also cutting billions of pounds in costs. So while the true European holiday season begins this month, it's unlikely the lull in the markets will make it until September. Market historians note that August is one of the worst months on record for stocks, something to remember before heading to the beach.
Still, any trip around Europe, its museums and its landmarks, reminds the observer that it's an ancient place, which has survived countless wars, crisis and lately, terrorist attacks, specifically in Madrid and London. This morning in London, commuters were quietly reminded of the fifth anniversary of the July 7 tube and bus bombings that killed 52 innocent people and injured more than 700. A heightened police presence around Trafalgar Square and the Houses of Parliament, combined with a surge in auto traffic in the city's already jammed streets to reflect a society that remains cautious, but steadfast in its desire to move ahead.
That's a pretty good way for investors to look at opportunities in Europe and globally in the markets in the coming months. There are many reasons to be cautious, but keep looking ahead. The economic recovery is still coming; it just might take a while longer. Alas, after Sunday we can no longer count of the World Cup for help. The next one isn't for four years, in Brazil.
The last four weeks marked a welcome relief from the climate of fear that gripped world markets in April and May, as names like Villa, Sneijder, Kaka, and Muller rose to prominence in the headlines and action photos, replacing the tired old shots of names like Trichet, Blankfein, Geithner, or Hayward, entering hearing rooms or press conferences. People gathered throughout Europe -- from the Villa Borghese Park in Rome to the Santiago Bernabeu stadium in Madrid -- not to light fires and protest the dreaded "austerity" measures from their governments, but to watch "the football" on big screen televisions together. Predictably, the games caused more heartbreak and controversy than joy. After all, 31 countries have to lose before one can win it all.
Markets reflect public perception and were quick to fall in step with the sports-induced lull. The plunging euro /quotes/comstock/21o!x:seurusd (CUR_EURUSD 1.2922, -0.0005, -0.0387%) recovered a bit against the dollar during the tournament. So did the British pound /quotes/comstock/21o!x:sgbpusd (CUR_GBPUSD 1.5436, -0.0004, -0.0259%) . Credit markets were calm while stocks in Europe -- and indeed globally -- were flat, rising earlier in the tournament then falling back to end a terrible quarter weaker. But lack of fear and nervousness about China's economy or the future of the euro helped pave the way for some feel good stories that have the bulls rearing their bruised heads again.
Europe's banks survived a deadline for repaying short-term loans to the European Central Bank last week, and borrowed far less than expected going forward. Agricultural Bank of China got its massive initial public offering launched this week amid high hopes from investors tied to the China growth story. And bankers from London to New York took advantage of the break in hostilities toward their industries to make a series of bold, new money grabs. Three ex-Goldman Sachs bankers in London priced a money-losing online grocery service called Ocado Ltd. this week, and hope to make away with some 90 million pounds ($136 million) in an initial public offering before investors realize the company is simply Webvan with a British accent.
And two of the co-founders of Kohlberg Kravis Roberts -- the original barbarians at the gates -- hope to throw open the doors and make a dash for it in a public stock offering to investors next week, a la Blackstone Group's /quotes/comstock/13*!bx/quotes/nls/bx (BX 10.56, +0.28, +2.72%) success.
But the stress of the last six months in global markets, particularly in Europe, is set to resume almost immediately after the final whistle at Sunday's World Cup final in South Africa. Earnings season in the U.S and in Europe begins on Monday, and with it expectations for some dire forecasts on business conditions for the rest of the year. Oil giant BP remains in critical condition as investors bet heavily on its future ahead of its earnings at the end of the month. But the most important event for the market right now at least is the coming stress tests for banks in Europe, results of which are set to be announced in about two weeks.
There is great concern that some of the 100 or so banks tested -- particularly the regional German landesbanks or the Spanish cajas -- will reveal enough weakness to trigger more concerns about larger bailouts and sovereign debt defaults in places like Greece, Portugal, and Spain. These concerns are likely unfounded. Anybody that remembers the U.S. stress tests on banks last year will recall that they were designed by the Treasury specifically not to add to the stress levels of investors. Indeed, weeks of concern about the U.S. stress tests ended with a rally in the market after Wall Street realized the last thing the Treasury was going to do was announce a major fault line in the banking system. Expect the ECB to finesse the European stress tests in the same way, causing a rally in stocks and bonds in Europe later this month.
But after that artificial event, there is indeed real reason for concern in Europe. Indeed, my personal stress tests revealed beneath the veneer of World Cup fever a deep fear about the economic future in specific countries. In Spain, a series of transportation strikes in Madrid layered on pain to a population suffering 20% unemployment, and facing a restructuring of its financial services system, with thousands of more job losses. In Italy, residents spoke of tourism being down noticeably and of concern that the contagion in other parts of Southern Europe could spread there. In the U.K., financial engine to Europe if not the world, the new government's emergency budget has staved off debt concerns for now. But nobody is under the illusion about the challenges that Prime Minister David Cameron's new coalition government faces in turning the economy around while also cutting billions of pounds in costs. So while the true European holiday season begins this month, it's unlikely the lull in the markets will make it until September. Market historians note that August is one of the worst months on record for stocks, something to remember before heading to the beach.
Still, any trip around Europe, its museums and its landmarks, reminds the observer that it's an ancient place, which has survived countless wars, crisis and lately, terrorist attacks, specifically in Madrid and London. This morning in London, commuters were quietly reminded of the fifth anniversary of the July 7 tube and bus bombings that killed 52 innocent people and injured more than 700. A heightened police presence around Trafalgar Square and the Houses of Parliament, combined with a surge in auto traffic in the city's already jammed streets to reflect a society that remains cautious, but steadfast in its desire to move ahead.
That's a pretty good way for investors to look at opportunities in Europe and globally in the markets in the coming months. There are many reasons to be cautious, but keep looking ahead. The economic recovery is still coming; it just might take a while longer. Alas, after Sunday we can no longer count of the World Cup for help. The next one isn't for four years, in Brazil.
Wednesday, July 14, 2010
Crude oil ends lower as policymakers trim growth outlook
Crude oil for August delivery lost 14 cents, or 0.1%, to $77.04 a barrel on the New York Mercantile Exchange. The contract had started the session lower, fluctuated in early session, but just before the release of the minutes was gaining 0.5%, buoyed by a weaker dollar.
Fed officials forecast gross domestic product to grow 3% to 3.5%, compared to previous estimates of 3.2% to 3.7%. The officials said they may consider further stimulus if the economy worsens.
"It's almost like a boxing match this week" between encouraging earnings and weak reads on the broader economy, said Matt Smith, commodities analyst with Summit Energy in Louisville, Ky.
Oil had kept its losses even after the Energy Department's Energy Information Administration reported a larger-than-expected decline in inventories, but a weakening dollar gave the commodity enough oomph to go for gains.
Fed officials forecast gross domestic product to grow 3% to 3.5%, compared to previous estimates of 3.2% to 3.7%. The officials said they may consider further stimulus if the economy worsens.
"It's almost like a boxing match this week" between encouraging earnings and weak reads on the broader economy, said Matt Smith, commodities analyst with Summit Energy in Louisville, Ky.
Oil had kept its losses even after the Energy Department's Energy Information Administration reported a larger-than-expected decline in inventories, but a weakening dollar gave the commodity enough oomph to go for gains.
API reports suprise increases for energy products
The American Petroleum Institute on Tuesday reported a surprise increase in oil, gasoline and distillates stocks. The Washington-based trade group said oil inventories rose 1.74 million barrels on the week ended July 9, while analysts polled by Platts had expected a reduction of 2.6 million barrels. Gasoline stocks rose 1.73 million barrels as well, the API reported, while stockpiles of distillates, which include diesel and heating oil, rose 3.19 million barrels. The analysts surveyed by Platts had expected increases of 950,000 for gasoline supplies and 800,000 for distillates supplies on the week. API data comes ahead of more closely watched Department of Energy inventories report Wednesday morning. Oil for August delivery lost a penny to $77.14 a barrel in electronic trading on Globex
Sunday, July 11, 2010
Support and Resistance
Support and Resistance is the basis of most technical analysis chart patterns whether you trade forex, commodity futures, options or stocks. Yes Virginia, you really do need to be able to recognize it if you want a low risk, sensible way to trade based on what you see in the charts. Areas of price congestion that create many well known chart formations are nothing more than levels of Support or Resistance.
In fact, just about every technical trading system or method uses Support and Resistance, whether their authors admit it or not!
This is not a new fangled, latest flavor of the month trading system at all...Support and Resistance has been around since before Jesse Livermore was but a twinkle in his daddy's eye.
It's not exactly rocket science to identify Support and Resistance, and it can be applied to any market: stocks, commodity futures and options, spread trading, forex, ETF's and single stock futures too. That's the good news.
The bad news is that there's a lot of "tip of the iceberg" canned information out there that's just plain inadequate. You're going to have to put in some time getting a "feel" for Support and Resistance on your charts. The cool thing about Support and Resistance is that with a bit of practice you can see it clearly on any type of chart, so there's no need to make a life-altering decision. The keyword here is practice.
Need help?
Check out the link to THE CHAT ROOM to the right of this post
In fact, just about every technical trading system or method uses Support and Resistance, whether their authors admit it or not!
This is not a new fangled, latest flavor of the month trading system at all...Support and Resistance has been around since before Jesse Livermore was but a twinkle in his daddy's eye.
It's not exactly rocket science to identify Support and Resistance, and it can be applied to any market: stocks, commodity futures and options, spread trading, forex, ETF's and single stock futures too. That's the good news.
The bad news is that there's a lot of "tip of the iceberg" canned information out there that's just plain inadequate. You're going to have to put in some time getting a "feel" for Support and Resistance on your charts. The cool thing about Support and Resistance is that with a bit of practice you can see it clearly on any type of chart, so there's no need to make a life-altering decision. The keyword here is practice.
Need help?
Check out the link to THE CHAT ROOM to the right of this post
Friday, July 9, 2010
Star Supply Renewables SA Hires Drunken Trader
An oil trader who got tanked and traded while intoxicated is getting a second shot at a career.
A Swiss commodity brokerage firm has hired Steven Perkins, who is banned from trading for five years by the United Kingdom's Financial Services Authority after trading $520 million worth of oil in a drunken blackout.
Starsupply Renewables SA, the world's largest biofuels brokerage, had thought about hiring Perkins for a considerable amount of time and expressed faith in Perkins's rehabilitation.
"We believe Steven Perkins is a good man who did a stupid thing," a spokesperson for the company told the Daily Telegraph.
The 34-year-old broker cornered 69% of the global oil market at around 2:00 a.m. in June of 2009, buying 7 million barrels of oil in a drunken stupor. The trade cost his old company, PVM Oil Futures, $10 million in losses.
Oil prices shot up by more than $1.50 per barrel as a result of the trade - an increase usually only seen after events of geopolitical importance.
Perkins initially said that the orders were authorized by a client, but later admitted that he bought the barrels while blackout drunk following a golf weekend of heavy drinking. FSA officials said that there seemed to be "no motive" for buying the oil.
The FSA announced two days ago that they had suspended Perkins from trading for five years, warning that "Mr. Perkins poses an extreme risk to the market when drunk."
Perkins has reportedly been sober for a year following an alcohol rehabilitation program. Starsupply will honor the FSA's sanctions and keep him away from the trading floor for the remainder of the suspension, tasking him with the creation of training manuals for graduate recruits.
A Swiss commodity brokerage firm has hired Steven Perkins, who is banned from trading for five years by the United Kingdom's Financial Services Authority after trading $520 million worth of oil in a drunken blackout.
Starsupply Renewables SA, the world's largest biofuels brokerage, had thought about hiring Perkins for a considerable amount of time and expressed faith in Perkins's rehabilitation.
"We believe Steven Perkins is a good man who did a stupid thing," a spokesperson for the company told the Daily Telegraph.
The 34-year-old broker cornered 69% of the global oil market at around 2:00 a.m. in June of 2009, buying 7 million barrels of oil in a drunken stupor. The trade cost his old company, PVM Oil Futures, $10 million in losses.
Oil prices shot up by more than $1.50 per barrel as a result of the trade - an increase usually only seen after events of geopolitical importance.
Perkins initially said that the orders were authorized by a client, but later admitted that he bought the barrels while blackout drunk following a golf weekend of heavy drinking. FSA officials said that there seemed to be "no motive" for buying the oil.
The FSA announced two days ago that they had suspended Perkins from trading for five years, warning that "Mr. Perkins poses an extreme risk to the market when drunk."
Perkins has reportedly been sober for a year following an alcohol rehabilitation program. Starsupply will honor the FSA's sanctions and keep him away from the trading floor for the remainder of the suspension, tasking him with the creation of training manuals for graduate recruits.
Way Of The Turtle
I just started a new book, Way Of The Turtle. I'll review it fully when I'm done but 63 pages in I'm totally impressed. It specifically deals with futures trading. Amazing discussions on the emotional aspect of trading and how it prevents most traders from reaching the profit goals they seek on their oil futures contract trading.
Way of The turtle
Curtis M. Faith
Way of The turtle
Curtis M. Faith
Sunday, July 4, 2010
CL Contract
Has anyone traded or looked at the CL, Crude Oil Physical Delivery contract? This puppy can move. Contract info: http://www.nymex.com/CL_spec.aspx
It caught my attention recently b/c I used to trade the QM (miny on Globex) and slowly the volume just died. I wasn't willing to daytrade something with so little volume. And I thought oil was out of my trading life.
Until I found the CL. I was able to find it due to the massive data available through Open ECry to their customers. I enjoyed trading the QM as it always provided a completely different instrument from the indexes to trade.
I know others here have asked about contracts that can move or just something to consider outside the indexes and the CL is a possible option. The volume is decent for an oil contract and can provide a nice contract to trade that does not move based on the US indexes.
Some highlights of this contract:
* Tick value = $10.00/tick USD
* Trading is good till 2:30pm EST. It is still open after 2:30, but due to the pits closing, the electronic contract dies as well. Kinda nice if you don't want to work will 4:15pm!
* This thing will react to the weekly oil inventory numbers, so I suggest knowing exactly when this report is (usually Wed @ 10:30am EST).
* This is a PHYSICAL contract, which means if you hold until settlement, it is NOT settled in cash. It is settled in REAL oil. In other words, do not hold into expiration.
* Speaking of expiration, the contract expires MONTHLY. I have an alert on the 3rd Wed of the month to watch volume rollover. Again, exit all trades of the current month by the 3rd Fri of the month. I would not suggest holding this contract overnight anyways, so if daytrading, you should be out of all positions by the close.
* This puppy can move, so please watch before trading real money.
* Most brokers/charting have this contract as the CL.
* Commissions can be higher than other contracts. Open ECry has been very competitive with me for CL trades. One issue I have found is that some brokers do not clear the Nymex/Globex trades, so your broker will have to route the order to another broker and of course, this adds on cost to you.
It caught my attention recently b/c I used to trade the QM (miny on Globex) and slowly the volume just died. I wasn't willing to daytrade something with so little volume. And I thought oil was out of my trading life.
Until I found the CL. I was able to find it due to the massive data available through Open ECry to their customers. I enjoyed trading the QM as it always provided a completely different instrument from the indexes to trade.
I know others here have asked about contracts that can move or just something to consider outside the indexes and the CL is a possible option. The volume is decent for an oil contract and can provide a nice contract to trade that does not move based on the US indexes.
Some highlights of this contract:
* Tick value = $10.00/tick USD
* Trading is good till 2:30pm EST. It is still open after 2:30, but due to the pits closing, the electronic contract dies as well. Kinda nice if you don't want to work will 4:15pm!
* This thing will react to the weekly oil inventory numbers, so I suggest knowing exactly when this report is (usually Wed @ 10:30am EST).
* This is a PHYSICAL contract, which means if you hold until settlement, it is NOT settled in cash. It is settled in REAL oil. In other words, do not hold into expiration.
* Speaking of expiration, the contract expires MONTHLY. I have an alert on the 3rd Wed of the month to watch volume rollover. Again, exit all trades of the current month by the 3rd Fri of the month. I would not suggest holding this contract overnight anyways, so if daytrading, you should be out of all positions by the close.
* This puppy can move, so please watch before trading real money.
* Most brokers/charting have this contract as the CL.
* Commissions can be higher than other contracts. Open ECry has been very competitive with me for CL trades. One issue I have found is that some brokers do not clear the Nymex/Globex trades, so your broker will have to route the order to another broker and of course, this adds on cost to you.
Friday, July 2, 2010
Trader Tip
Never move your stop. I trade Crude oil Futures Contracts and have made the mistake on more than one occasion of moving my stop. DON"T. Take your medicine. Every trade can't be a winner and losing is part of the business we are in. Make no mistake it is a business and every business has to take losses, be it for old inventory, bad economies or employee mistakes.
Make your stop reasonable and stick to it.
Make your stop reasonable and stick to it.
Thursday, July 1, 2010
Bon Trade
I have tried several crude oil futures trading chat rooms over the last year in an effort to better my skills. Frankly they were all useless.
Then I found Bon Trade, their website is www.bontrade.org
Truly great chat room. Fantastic support and the trades are incredible. The best thing is that the trades are not scalps they are 20 to 60 cent waves. I am paying way less commission and have really reduced my risk.
Check it out, they will give you a free trial and you can watch him trade because he projects his charts and shows you where the best entries are. The price is also really low I made back the monthly fee on my fist day.
Then I found Bon Trade, their website is www.bontrade.org
Truly great chat room. Fantastic support and the trades are incredible. The best thing is that the trades are not scalps they are 20 to 60 cent waves. I am paying way less commission and have really reduced my risk.
Check it out, they will give you a free trial and you can watch him trade because he projects his charts and shows you where the best entries are. The price is also really low I made back the monthly fee on my fist day.
Trading In The Zone
I just finished a great book called "Trading In the Zone". It deals with the emotional side of trading and really describes how to control when you need to most. If your like me trading live can be a nerve racking experience at first. You really need to work on the emotional side of things and do your best to eliminate it from your trading day. I highly recommend "Trading in The Zone" for any trader, newbie or veteran it will improve your results and make trading a much more enjoyable experience.
Trading In The Zone
2001, Mark Douglas
Trading In The Zone
2001, Mark Douglas
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