Putting The Shorts Back On.

I was afraid that the market could rally with the dollar so weak in the trading session. The stock market rally did not materialize and I think its safe to put the shorts back on. I had closed them earlier and I am putting them back on.

Tough session to gauge direction. Bonds and US dollar moving big time and it seems like the volatility will come back to the markets. I expect lower prices on the S&P for next week.

I am short on time today. Have a good trading day and a nice weekend.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Too Much Uncertainty. Closing S&P With A Couple Of Points Profit.

Another scratch trade. Things are very volatile and uncertain. Dollar is falling big time, I think there is a risk of an uptick in the stock market. I am backing off for now.

More on this later.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Big Trading Positions. Dressing To The Occasion.

Euro Zone inflation data came below expectations and that should hurt my short 2 Year Schatz Futures position.

"European consumer prices fell by the most in at least 13 years in July after energy costs declined and unemployment rose to the highest in a decade. Prices in the euro region dropped 0.6 percent from a year earlier, the most since the data were first compiled in 1996" in Bloomberg

But the fact is that they barely moved and are still very much in the money. I know that this trade will take some time to fully develop, but its has always been in the money and I am playing it for much lower prices. I am really playing the big swing here. If you have the time, go read the Gary Bielfeldt interview in the Market Wizards book and go through that part where he explains how he really got rich in a single play in the bond futures. We can have a similar opportunity here in these German 2 Year Government Bonds.

The GDP report will come out at 8.30 am and a little later we will have the Chicago PMI. I am going short into the data because I expect the next big move in the stock market to be lower no matter what the economic data prints today. I am short at 987, so I don`t have many profits to play with but I am with a high risk appetite. I think we can have a meaningful correction because the market is way overbought, at least as far as I am concerned.

Anyway, I had to dress my best suit and by best tie today. And off course I am using the One Million parfum from Paco Rabanne. The long timers in this blog know what I mean. When I have big positions on, I have this small supersticion to dress to the occasion. I am sure we all have our little things.

Have a nice trading day. Don`t let them beat you.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Reversal, Sweet Reversal. Cash Coming In.

I love to short on these big updays and then witness a reversal late in the session. I was not expecting to go home in the money in this short S&P position and I was more playing for position.

But a reversal is always sweet isn`t it?

Good play.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

"When The Market Looks At Its Best, Its Time To sell"

Interesting inflation analogy I have found today on The National Newspaper:

“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.” The words of Ronald Reagan, who spent the first years of his US presidency battling the problem, may appear excessive, but you have to remember how pernicious it was during his time. US inflation peaked at 15 per cent in 1980, the year he took office. in The National Newspaper

But this is just food for thought. Regarding the market action I will recall an Eli Tullis quote, "When the market looks at its best, its time to sell." I already did.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Shorted S&P Futures AT 983, 987 and 992. I Have My Position On.

I added a bit more to my shorts and I am now short at 3 different levels, 883, 987 and 992. So I have an average shorting price of 987 for all my contracts. I do not plan on adding more to this position but I will also try to score a few dozen points. This will be one of my summer trades.

I am still holding to the short Schatz Futures that are benefiting from this rally and may cushion some trading losses that may occur from this short S&P Futures trade in the near term.

We will probably test 1,000 later today or tomorrow.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Shorted S&P Futures At 983. Initial Claims Will Come Out At 8.30 AM

Markets moved a lot higher overnight and the S&P Futures are trading up over 1% on Globex. I am shorting again, over 10 points higher then I closed my shorts yesterday. I have a moderate line at 983 and I am planning to add on the way up if needed.

There is a rally risk today and we are getting closer and closer to 1,000. We may go there this week. Even though I consider that its a good point to begin shorting with a very moderate line.

I am still holding to my 2 Year Schatz Futures and they are still trading in my direction.

I found El Erian comments particularly interesting, "the stock market spent July on a "sugar high," rising to levels not justified by an economy that is still limping along, Pimco's Mohamed El-Erian told CNBC." I totally agree with him.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

S&P Keeps Unresolved. Closing My Short Line.

I closed my short line for the second day in a row. Another scratch trade. I am not sure about the future direction of the stock market. Everything pointed to lower prices today but the market remain relatively strong through out the session and especially at close.

I will keep analysing it and try to figure out its future trading direction.

I have also closed the US dollar on today`s strength. I managed to gain over 200 pips in two trading sessions. This one gave a great boost to my trading account.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Obama Says: "We May Be Seeing Beginning Of End Of Recession"

These comments may seem quite bullish at first sight but they are very bearish. That means that the probability of a second stimulus package are dim and that rates may go higher then expected because the Federal Reserve will be less pressured to hold rates at such a low level.

I am keeping my S&P Futures short lines for lower prices. Lets see how the markets react.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Re-Shorting S&P Futures At 972. We Will Break Down.

I am re-entering my short S&P Futures position at 972, pretty close to the price I left them yesterday.

Risky assets are being sold across the board, dollar is trading up, oil is down and the stock market is overbought. This is the perfect recipe for a market break down.

Today I am trading with a good vibe. I am listening to the All Chilled Radio Station on ITunes. They have a fantastic DJ there. You can find it on the Dance category.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

US Dollar Is Strong Today: Still Holding The Position

I am hanging to my US Dollar position. I am expecting a move towards the lower end of the trading range at around 1.3900.

Commodities are selling off hard today and the asian markets posted big drops overnight.

Fed rate hike expectations, a shrinking trade deficit, a rising US savins rate are my reasons to hold the US Dollar. Its playing out fine so far with my trading position 140 pips in the money.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

EIA Oil Inventories Are Coming Out Later Today

Yesterday night the release of API inventories was very bearish for crude oil. Crude Oil Futures are dropping over a dollar in the Globex market. If the EIA confirms the API inventory data we can extent the sell off.

Natural Gas has been very soft recently. A retest of the recent lows is getting more and more likely. Recently Jim Rogers made some very bullish comments about Natural Gas, “When the global economy eventually recovers, natural gas may be the strongest performer in energy just because it’s been beaten down so much now,” Jim Rogers said on Bloomberg this week.

The problem with Natural Gas for medium to long term investors is that the roll overs will kill you. That why the UNG ETF, the most popular Natural Gas ETF has been performing so poorly over the months. Add a 3% medium roll over per month and suddendly Natural Gas has to rise almost 40% per year just for the investor to break even.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

API Inventories Are Bearish For Crude Oil

The American Petroleum Institute said that domestic crude stocks rose 4.1 million barrels last week as imports increased.

Gasoline stocks dropped just 47,000 barrels and distillate stocks rose 116,000 barrels, the API said.

Lets see if this data is confirmed tomorrow in the "official" EIA inventory data. Probably its not a bad time to short crude oil.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Closed The S&P Futures At 970. Where Is The S&P Heading In The Near Term?

I was able to antecipate the market turn today and closed my short line at 970. I had a target for today, for the reasons stated in the last post so I was trailing my profits with a small stop. All in all it was a good trading day.

I am not sure if I will re-short or not. I need to see the market action tomorrow. He have a strange technical formation, a small range trading session with a big tail on top of a big rally. I will wait to see in which direction volatility will expand keeping in mind that we are in the summer dollrooms. The market seems to be flutuating in the 970`s area. Will gravity set in? Will the money managers keep piling in? I am not sure yet. I will try to find out tomorrow if I decide to trade the S&P`s.

Regarding Forex, I will keep my US Dollars. I think we can test the lower end of this big trading range at around 1,3900. The US Dollar has been rather difficult to read. I can advance 5 good reasons to buy it and 5 good reasons to sell it. But this recent economic data strength and the possibility of early rate hikes will probably keep the dollar well bid. I am betting on it.

I left office pretty early today and I went to buy the promised ring. I missed the last few hours of the trading session but nothing really important happened besides the trigger of my stop on the S&P Futures. Today the market paid for the extravaganza, but its not a good habit to make the market pay for anything. Usually it just goes the other way around.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Profits Are Being Converted Into Gold And Sapphires

Things are looking good for my red ship. My short S&P Futures lines are doing fine and my US Dollar position is also going up nicely. Today`s profits are going to be converted in gold and sapphires. Are you getting it?

Well, I will explain myself a little better. My wife asked me for an extremely expensive ring. I am lucky that markets were generous today so that I can use these profits to purchase the gold ring. I am happy for her.

I have been wrong a few times on the US Dollar direction. But it seems I got this one right, at least for now. I am US Dollar bullish, and for what I can see the US is coming out of this recession a lot sooner then anybody expected, even me. Buying dollars will probably be the best trade of this summer.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Fed Will Hike Rates Sooner Then Expected

I think this will be the dominant market theme for the remainer of the summer and early fall. With all these economic recovery signals including today`s housing data, the Federal Reserve may need to begin hiking interest rates sooner then expected. This will certainly spoke the stock market. The bond market is signaling that the private sector is already tightning monetary conditions with the steady rise in medium and long term interest rates.

"I think we will probably have to begin raising rates sometime in the not-too-distant future," Philadelphia Fed President Charles Plosser said in an interview published on the Wall Street Journal Web site. "That will probably occur while unemployment is still high", Plosser said.

How can we play this? There are several options. We can short the stock market, or short government bonds especially long term interest rates like the 10 and 30 year Government Bond Futures. But another interesting play might be to be long dollars against the euro currency or long the US Dollar Index.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Art Cashin Predicts A Mild Correction

Very interesting comments from the veteran UBS trader Arthur Cashin. Art has been bearish in the last few months but his bearishness is beginning to fade. Time to add to the shorts?

"The 2-week run was particularly impressive. You've got a Dow Theory buy signal; the market broke out to a higher high; it changed some of the charts."

"We are heavily overbought now ...We may see a correction this week."

Cashin based his projection on "looking at the number of stocks above their 10-, 20- and 30-day moving averages. I think it'll be a mild correction...ending about August 2 to the 5th."

Then, Cashin said, markets will most likely enjoy a "very impressive but head-fake rally — until the fall." Then stocks will take "another leg down."

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Should We Have An Weekly Or Monthly Trading Goal?

I found this very interesting article written by Brett Steenbarger, author of The Psychology of Trading (Wiley, 2003), Enhancing Trader Performance (Wiley, 2006), and The Daily Trading Coach (Wiley, 2009). I haven`t read any of his books but I reaaly enjoyed reading this small piece on his blog:

"Of the traders I've known personally through my work, only one rarely has a losing week. He is quite disciplined in his trading and limits his trades, both in size and setups. That prevents him from losing too much on any one trade, and it keeps odds in his favor. Of the hundreds of other traders I've known well, every one has had losing weeks and strings of losing weeks. Indeed, it's not uncommon for excellent traders to have losing months or a period of losing months. Markets change, slumps occur. If you are profitable on 70% of your weeks, 2.7% of the time--or about once a year--you'll have a string of three losing weeks simply by chance.

It's great to make winning weeks your *goal*. And it's good practice to never lose so much money in one day that you can't have a green week. But there are plenty of elite traders who make good money and undergo losing periods. I work with them every week."

I usually work with a monthly target, meaning that I try to be profitable every month. I am used to that metric and I manage to be profitable over 80% of the time. But I am using more and more systematic setups on my trading and I am planning to switch my trading goals from monthly to weekly.

But in general I think every trader should have a time period in which he measures his performance. Off course that a pure discretionary trader is probably less inclined to adopt such a measure because he depends on the opportunities presented before him. Even though I think its useful, at least the monthly mark.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Markets Are Soft: Is This The Beginning Of The Correction?

It looks like the correction has arrived. No surprise at all given the overbought nature of this market.


Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Bernanke`s Comments Over The Weekend

Ben Bernanke was in Kansas City this weekend where he made several comments regarding the economy, interest rates and last year`s bailouts:

For the next couple of years, “inflation will be quite low,” Bernanke said. Asked about the dollar, he said that “the best way to have a strong dollar is to have a strong economy.”

“I have a lot of confidence that within a few years that we will be not only back on track but that we will be growing strongly again,” Bernanke said.

Bernanke said he expects the U.S. economy to grow at an annual rate of 1 percent in the second half of 2009, while unemployment will exceed 10 percent before beginning to decline.

I found the comments on the US Dollar to be the most interesting. I think he is right about that. The stronger the US economy gets, the better for the US Dollar.

Regarding trading, I am still short the S&P Futures. It seems that the markets may trade higher on the opening bell but I consider this late strength to be the bull`s last breath. Off course that a run to 1,000 is not out of the cards and if it happens I plan to add to my moderate (for now) short line.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Warren Buffett: "Business Is Still Flat"

Interestingly the Omaha Oracle, Warren Buffett is saying that "business is still flat." Buffett claims that he receives sales data from a cross section of businesses and that there is no uptick in sales. But he stresses that doesn't mean he's negative on stocks, predicting the market will revive before the economy does.

"I would much rather own equities at 9000 on the Dow than have a long investment in government bonds or a continuously rolling investment in short-term money." says Buffett.

As usual, he points out he is not making any predictions about what the stock market will do in the next coming weeks or months.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Low Volume May Kill Stock Market Rally

Volume has been pretty anemic in Wall Street. As Art Cashin usually says, bear market rallies die on declining volume. We shall see,

"Stock trading in the U.S. hasn’t slowed this much midyear in at least two decades, causing some investors to worry that the steepest Standard & Poor’s 500 Index rally since the 1930s will fizzle." in Bloomberg.com

Going Short S&P Futures Into The Weekend

I put out my short line again. I am going short at 973 into next week. I managed to grab 5 points early in the trading session and I am putting the short line back on.

I have been avoiding any discretionary trading because of the imminent birth of Enzo but this is a great trading opportunity and they do not come along so often.

Markets are very overbought, everybody on the street is as bullish as the next guy. The stock market looks toppy to me. Off course we can go another 10, 20 or even 30 points higher. We can always move higher from an overbought situation but probability favours shorting from these levels. I will keep some ammo to short at higher levels if needed.

Today I traded listening to one of my favourite bands, Dave Matthews Band. I really like their song, "Funny The Way It Is".

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Warren Buffett: "Inflation Is Coming"

Warren Buffett was on CNBC earlier today and he is quite bullish on stocks for the long term. But the most interesting topic of his interview was inflation:

Buffett repeats his warning that there are "real inflationary possibilities" down the road, due to the massive stimulus being applied to the struggling economy. But he has also said in the past that inflation is a necessary side-effect to helping the economy improve, which he thinks should be the nation's primary objective. Buffett again endorses Ben Bernanke as Federal Reserve chairman, saying "I don't think you could have anybody better than Bernanke in the job. He understands all the issues." in CNBC.com

Its the second time in a few weeks that Warren Buffett makes this "inflation warning". But I disagree with Buffett on the best way to play future inflation. I think that commodities are the best play. Things as Silver, Gold, Natural Gas or Oil are in my view the best long term plays to hedge against inflation. But the best way of all is to have a good job, a good income stream or good trading abilities. Those will always be ahead of everyone else no matter what.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Eurozone Moves Closer To Recovery. Good For My Schatz Futures Position

"Europe’s economy moved closer to recovery as the manufacturing and service industries contracted at the slowest rate since August and German business confidence climbed to a nine-month high.

A composite index of both industries for the 16 euro nations rose to 46.8 from 44.6 in June, a survey of purchasing managers by Markit Economics showed today. According to a separate report by the Ifo Institute, sentiment at businesses in Germany, the region’s largest economy, rose to 87.3 from 85.9." in Bloomberg

This is great news for my 2 Year Schatz Futures short position. Short term rates are ticking up.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Shorting S&P Futures At 970

I cannot sit on my hands. This market has to be shorted. I have a short line at an average price of 970. I think this is an easy short.

My 2 Year Schatz Futures continue to perform nicely as rates are going up everywhere.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

S&P 500 Is Completely Overbought

S&P Futures are trading at multi month highs this morning. The market is way overbought and the Nasdaq is on track to close up for the 12th consecutive session. That does not happen since January of 1992. Amazing, not?

Anyway my systems are kicking in short positions. I sold at an average price of 962.50. The system will sell 2 more tranches above the market if needed.

Will my own winning streak end today?

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

I am Living Every Trader`s Dream

What are the biggest trader`s dreams? The first one is to be consistently profitable. The one I am talking about and that I am experiencing now is to profitable every day. This is the trader biggest dream, at least as far as I am concerned.

Because of the imminent birth of my son Enzo I have been trading almost exclusively systematic intraday plays on the S&P Futures. I cannot sit on positions that I will not be able to follow for a few days or weeks in a row. So I am playing mostly systems or systematic trades. And its amazing how well I am feeling about this posture. No fundamentals to analyse, no need to watch every market reaction to the news, no need to read myself and others about market sentiment. I must admit that I am having a great time.

Probably sooner or later I will miss the "big swing", the major trading positions that can double your trading account in a few weeks or months. The analytics, the brain power and the emotional control to master a trade like that have no rival in trading. Its a world of its own. Its the "live or die" approach that made Jesse Livermore his millions and the approach that took them away from him. I like that style, its in my blood. Or at least I thought it was, because I am really enjoying this quiet, dispassionate and very profitable trading life.

I have always considered myself a maverick trader, (Merriam Webster definition of "maverick": an independent individual who does not go along with a group or party) but for the moment I am trading like a scientist. More like an Einstein as I have been profitable for the last 10 or 11 trading days with no pain whatsoever. You know what I mean.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Oil Inventories Out. Short Term Bearish On Crude Oil

Crude inventories fell by 1.8 million barrels, to 342.7 million barrels, which is 16 percent above year-ago levels, the EIA said in its weekly report.

Analysts had expected a drop of 2 million barrels for the week ended July 17. Gasoline inventories rose by 800,000 barrels, or 0.4 percent, to 215.4 million barrels. That was in line with analyst expectations and 3.2 percent above year-ago levels.

U.S. refineries ran at 85.8 percent of total capacity on average, a drop of 2.1 percentage point from the prior week. Analysts expected capacity to slip to 87.1 percent. The refiners, Tesoro (TSO) and Valero Energy (VLO) are selling off today.

Oil is flat, but its not participating in the commodities rally. That is a bearish signal for oil prices.

I am active on the S&P Futures, going short on a system generated trade at 953. The plan for today is to short on the way up if needed. The stock market is very overbought.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

API Inventories Are Bearish

"The American Petroleum Institute report was bearish relative to expectations, with stock builds in each of the major categories," said Tim Evans, analyst at Citi Futures Perspective in New York.

Late yesterday, the API released its inventories report showing crude oil stocks rose 3.1 million barrels. Gasoline supplies rose 1.3 million barrels and distillate stocks rose 147,000 barrels, the API said. Refinery capacity utilization fell 2 percentage points to 84 percent.

Its a bearish report but the Energy Department official inventories willl be released later today. Even though oil will probably trend lower. The report looks bearish to Tesoro (TSO) and to Valero Energy (VLO).

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Economist Martin Feldstein Sees A Double Dip Recession

The highly regarded economist Martin Feldstein is predicting a double dip in the US economy. This is the article I have found on Bloomberg:

The U.S. recession may not be coming to an end and there is a risk the economy may experience a “double-dip” contraction, said Martin Feldstein, a professor of economics at Harvard University.

“There is a real danger this is going to be a double dip and that after six months or so we’ll have some more bad news,” Feldstein, the former head of the National Bureau of Economic Research and Reagan administration adviser, said today in an interview on Bloomberg Television. “We could slide down again in the fourth quarter.”

I will not do any more trading today. I did a good intraday play on the S&P Futures from 955 to 950 and I will re-energise for tomorrow`s battles.

I watched a very scary movie yesterday, "The Last House On The Left" (2009). If you enjoyed "Funny Games" this one is for you.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Art Cashin: Still Skeptical About The Rally

I really appreciate listening to Art Cashin`s comments everyday. That`s one of the rare moments when I have some sound on my TV set. Normally I have CNBC on but with no sound at all. Most of the guests and commentators are nothing but propaganda guys with no insight at all.

But Art Cashin is different. He has been around for decades, and knows a thing or two about the stock market and he is on the right place to listen to the right things. But he has been wrong all the way. He has been bearish almost since April and the stock market keeps on going higher and higher. Here are his comments from yesterday:

"If we can break out to new highs, you might get a whole new leg up in this."

"But I haven't seen the changes in the economy...that I think would justify a 15 percent move up."

On the earnings season front he added,

"Even if you can take your costs down to zero, you've got to stop somewhere."

Finally he highlighted the Ben Bernanke Testemony later today,

"People fear if you bungle the [monetary and interest rate] exit strategy, inflation could explode."

I am still holding to my short Schatz Futures and playing some systematic intraday trades on the S&P Futures. Things have been going very well for my trading.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Goldman Sachs: The S&P Will Rally To 1060 Year End

"Goldman Sachs Group Inc. boosted its forecast for the Standard & Poor 500 Index, saying improving earnings will spur the steepest second-half rally since 1982.

The benchmark index for U.S. stocks will advance 15 percent from its June 30 level to 1,060 on Dec. 31, an increase from David Kostin’s prior projection of 940. The chief U.S. investment strategist at New York-based Goldman Sachs also lifted his 2009 and 2010 earnings estimates for S&P 500 companies to $52 and $75 a share, which are 30 percent and 19 percent higher than prior estimates." in Bloomberg

I do not agree with this projection. I think the equity markets are in no man`s land and I am not buying nor shorting. If economic conditions continue to improve, long term interest rates will skyrocket making the stock market its hostage. In my analysis we will have a trading range at best.

Regarding my trading, I am holding to my 2 Yesar Schatz short position. Its performing nicely. A fifth of the Ferrari I mentioned yesterday is already in my garage.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Mobius Says "US Economy Is Out Of The Woods"

MarK Mobius was interviewed by Bloomberg Television and he made some interesting bullish comments about the US Economy and the Russian Stock Market:

"The U.S. economy is now “out of the woods” and doesn’t need another stimulus package, Mobius said. Russian stocks are “very undervalued” and should be a “big holding” for investors as markets recover, the fund manager said." in Bloomberg.com

Maybe he is right about Russian Stocks long term. In the short term stocks everywhere look a bit vulnerable to me. The russian stock market ETF, Market Vector Russia ETF Trust, RSX hit 10 USD in March and is trading now at around 20 USD, up 55% year to date.

Anyway, I am only holding a short line in the 2 Year Schatz Futures and I will do some systematic trades in the S&P Futures.

If this 2 Year Schatz Futures trade goes well I will give myself a very good gift. I am planning to buy a Ferrari.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Oil And Natural Gas: Price Relationship

I found this very interesting piece written by Maria Bartiromo about the relationship between oil and natural gas prices. By the way I know of many traders playing this trade, long natural gas, short oil:

Supply and demand are the most important factors in determining the price of anything, but Dan Niles, Co-Chief Investment Officer at Alpha One Capital Partners, is closely watching another way to view oil prices, and that is their relationship to natural gas.

As Dan recently emailed me, oil has historically traded at 8x to 10x the price of natural gas. One of the reasons it usually stays within that range is the law of physics: On a thermal basis, it takes roughly six times the amount of oil to generate the same amount of heat as natural gas.

Looking at today’s prices, however, oil is going for a hefty 17x the price of natural gas, far outside the historical norm.


What does this mean? Either oil is overvalued right now, or natural gas is incredibly cheap. Dan told me he believes that oil will get crushed or natural gas will go up a lot over the next year “because the laws of physics do not change.”

Big Macro Trading Opportunities

As Christian Siva-Jothy said in the book "Inside The House Of Money", "I am great believer that there are 3 or 4 major macro opportunities each year." And then added, "One of the most difficult things about trading is not to trade. That`s probably one of the most common mistakes that people starting in this business make. Overtrading is as bad as running losing positions for too long."

Christian Siva-Jothy was Head of Proprietary Trading with Goldman Sachs so he has been in touch with hundreds of traders and able to grasp their good and bad habits.

I think the next big macro opportunity will be to short 2 Year Schatz Futures on Eurex. This is a play on rising interest rates in Europe. 2 Year yields are at 1.20, the lowest they have been in this cycle. I think they can only move up, or at least that the next big move will be upwards.

I have been on and off this trade and I have already made some money off this trade. I am planning to stay in this position for a long time. I am short at 108.23 with a major position.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Surfing On Natural Gas Futures

I really caught this explosive move in Natural Gas with a moderate line. Natural Gas Futures are surging more then 10 % and I am sitting on them till the close of trading.

What a day!

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

S&P 500 Has Biggest Rally Since Mid March

The S&P 500 index , which posted a gain of 6.09% in the past three trading sessions, had its best 3-day percent gain since March 12, 2009, when the US equity benchmark rose 10.97% during a 3-day period; right at the start of the recent rally.

The market is obviously overbought but I am not considering shorting for now. I will keep playing this market through systematic S&P Futures trades from my system. There will be good opportunities along the way like the ones we had on Alcoa, Tesoro and Hecla Mining.

Oil is rebounding again but I think it is stil in no man`s land. It can move 5 dollars either way in the next few trading sessions. I am also tracking Natural Gas. I may play it on the long side if it panic sells from here.

I will leave with a good trading quote from the "Inside The House Of Money", "trading is all about confidence. The more confident you are, the bigger your position can be and the greater your staying power. But you have to know why you are confident; it can`t be foolish confidence like arrogance or invincibility."

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Alan Blinder: The Fed Will Start Tightning In Early 2010

The Federal Reserve may start to raise its target interest rate from near zero in the first half of 2010 as the economy recovers, Princeton University economist Alan Blinder said.

“I think the Federal Reserve will look around at the state of the financial system and the state of the economy” and “bump the federal funds rate above zero,” Blinder, who served as Fed vice chairman from 1994 to 1996, said in a Bloomberg Television interview today. “I am not talking about a massive tightening,” he added.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Will The S&P Futures Reverse On The Fed Minutes?

These comments seem pretty hawkish to me. Markets are overbought anyway so I am going to give a shot on the short side. I am selling some S&P`s short at 925. Lets see how it goes.

The Fed is beginning to talk about an exit strategy. Lets see if it spooks the market.

By the way, my Hecla Mining shares are doing great today. I will take some profits.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Natural Gas Selling Off After Hitting 3.50

Natural Gas Futures reversed course after hitting 3.52, a multi session high. Are we going to test the recent lows again?

I may play Natural Gas for an oversold bounce if it retests monday`s low at 3.24.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Good S&P Futures Trading Today

It was a solid trading day. I did 3 good systematic trade on the S&P Futures for a good profitable day.

I missed the action on the financials and I did not play Intel. It is surging in after hours trading, up more then 7%. That will probably set the tone for tomorrow.

I am still short on the EUR/USD and I am looking forward to play silver and some silver stocks like Hecla Mining (which I own a few thousand shares) if it corrects a bit further. Have you seen the PPI data? We are in danger of an inflationary spike if the Fed does not reverse course soon enough.

I went to a friend`s marriage this weekend where I heard this Seal`s song for the first time. Listen to this version of "Amazing", Thin White Duke Mix. Truly amazing song and very suitable for high frequency trading.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

API Inventories, July 14th: Crude Oil Stockpiles Fell

U.S. crude oil stockpiles fell last week as domestic refiners boosted run rates, the American Petroleum Institute said on Tuesday.

Commercial crude inventories fell 1.2 million barrels, with the U.S. East Coast bearing the brunt of the decline, according to the weekly report from the industry group. Analysts had expected a decline in crude stocks of 1.6 million barrels, according to a Reuters survey.

Domestic refiners, meanwhile, boosted crude runs by 93,000 barrels per day, raising output of both gasoline and distillates, according to the report. Distillate inventories, which have soared to near 25-year highs in recent weeks, rose 656,000 barrels against expectations for a 1.9 million-barrel increase.

Gasoline inventories dipped 69,000 barrels against expectations for a 1.0 million-barrel increase.

Is am curious to see the impact this report will have on Tesoro (TSO) and Valero Energy (VLO).

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Art Cashin Thinks This Week Is Critical For The Stock Market

Art Cashin, the UBS trading veteran reiterated his certainty that "by the close of business on Friday, we'll have a much better idea of where markets are headed."

"I think this week is critical," he added. "We're on the verge of demonstrating that the head and shoulders that everybody was talking about, might turn out to be a failed negative — which could lead to a super-rally."

"But it's too early to tell," he added cautiously.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Silver Will Be A Good Long Term Play

Jim Rogers said yesterday in an interview to the Economic TImes that "if I were a bright young man, I would be buying sugar and silver, given the state of the world. That’s not a recommendation, but I am just saying I do own some silver. Silver is cheaper than many things on a historic basis."

I agree with Jim. But I am not sure about the short term. In the short run Silver is very US Dollar sensitive and I am short term bullish on the dollar. Even though Silver had a decent correction and is trading near a multi week low. It may be wise to begin accumulating from here.

How to play it? Well, the Silver ETF (SLV) is probably the best way. Regarding some silver mining stocks, Hecla Mining (HL) and Coeur D`Alene (CDE) are probably two good and very agressive plays.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Is Tesoro (TSO) Ready For A Short Squeeze?

Tesoro has been heavily sold in recent weeks and is trading below its March low. Tesoro stock (TSO) tops the short interest S&P 500 list, ranking 13th. It is probably on the verge of a major short squeeze.


As Richard D. Wyckoff once said, "speculation, in its truest sense, calls for anticipation." I could not agree more.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Meredith Whitney On Unemployment And Banks

"The Unemployment rate keeps driving higher and the banks are not prepared for 13% unemployment" Meredith Whitney

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Buying US Dollars For A Trade

I am buying US Dollars against the Euro Currency. I expect this trading range to be broken on the downside. The EUR/USD is trading at 1.3950 at the moment. I think the next big move will be down through 1.3800.

The rising savings rate, the shrinking Trade Deficit and sentiment in the financial markets are the basis for this trade.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Meredith Whitney Upgrades Goldman Sachs

The best banking analyst on Wall Street upgraded today Goldman Sachs. This is the first upgrade from Meredith Whitney in a long, long time. She has set a 186 dollars price target for the stock. Here is the Bloomberg piece on this subject:

Meredith Whitney, founder of Meredith Whitney Advisory Group LLC, upgraded Goldman Sachs Group Inc. to “buy” from “neutral,” her first such rating on a U.S. bank since she started the firm.

Whitney has a $186 price target on New York-based Goldman Sachs, the analyst said in a note to clients today. The stock, which has gained 68 percent this year, closed last week at $141.87 in New Stock Exchange trading. in Bloomberg

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Investor Sentiment Bearishness Increases: The Association of American Individual Investors

I found this very interesting article on Seeking Alpha about investor and consumer sentiment, showing the increasing pessimism among US investors:

"The Association of American Individual Investors’ weekly sentiment survey had the bulls at 28% again (a decline of 10% points) and the bears increased by the same amount to 55%. This definitely moves sentiment towards real pessimism."

And also among other consumer and investor confidence indexes:

"Another measure of consumer economic sentiment is the Rasmussen Index. This survey is conducted every day so it is even more granular. After hitting a low in March 2009 that corresponded to the start of the spring rally, both the Rasmussen Consumer Index and Investor Index recovered along with the stock market. But now, they are once again falling.

As of Friday, the Rasmussen Consumer Index has fallen to 63.3 the lowest level since March 10th, 2009. The Rasmussen Investor Index is slightly more robust, having hit a four month low at 69.5 yesterday. To provide some perspective, the Consumer Index’s maximum was 127 reached in early January 2004 and its minimum, March 2009, at 54.7. The Investor’s Index’s maximum was 150.9 reached on early January 2004 and its minimum, March 2009, at 52.5."

You can read the full article here.

US Trade Deficit Fell: Dollar Bullish

The US Trade Deficit fell to the lowest level since 1999. This combined with the rise in the US savings rate is very dollar bullish.

"The U.S. trade deficit fell in May to the lowest level in more than nine years as exports posted a small gain while the weak American economy pushed down imports for a 10th straight month.

The slight rebound in exports, combined with a slower decline for imports, suggests that global economic activity may be receding at a slower pace. Delayed revivals overseas will hinder a domestic rebound, but most analysts still expect the American economy to grow later this year.

The Commerce Department said the trade deficit narrowed to $26 billion, a drop of 9.8 percent from April and the lowest level since November 1999. This year, the deficit is running at an annual rate of $350 billion; it was $695.9 billion for all of 2008." in The Washington Post

Warren Buffett: "Sales Are Very, Very Soft"

Warren Buffett was on CNBC earlier today and made some interesting comments on the economy, stimulus packages and inflation:

Warren Buffett tells CNBC that consumer sales by Berkshire Hathaway companies have remained "very, very soft" in recent weeks. Buffett says he'll know when things pick up because he gets constant "contemporaneous" updates on sales from his companies.

Buffett says the economy is in a very "tough period" right now. Buffett says one way to help the recession end more quickly is not to build any additional houses, because there are still too many on the market.

He does believe a second stimulus package may be needed, although he notes that the first stimulus package was "never designed to act fast." He also repeated his warning that all the "medicine" given to the economy, while necessary, will produce inflation as a long-term side effect.

While government has some influence on how fast the economy does recover, Buffett says Washington has less power than many might think and doesn't have a "silver bullet." Any stimulus package should not be seen as a "panacea." in CNBC

I do not have any trading positions today so I will watch the Tour De France Live on tv. Go Lance!

Great Trading Raid. Third Best Trading Day Of The Year

I did a pretty good raid in the markets from yesterday to today`s opening. I had a enourmous Alcoa long position, a big Euro Schatz Futures short line and small positions in Natural Gas Futures, Hecla Mining, DryShips and NovaGold.

All my positions were in the money today and I took my profits. I will wait patiently for another big trading opportunity and I will take a bit of a rest. After major raids I like to take a few days off to gain some market perspective. A new trading opportunity will arise and I will do my best to grab it.

By the way, Oil has come down over 13 dollars per barrel from its recent high. No surprise at all, because fundamentals are not supportive of 70-plus prices.

If are in the mood for good music visit this band`s Myspace. Mana are a very good mexican band. Try En El Muelle De San Blas, its my favourite.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Closed All Stock Positions.

My protective stops were hit and I kept most of my profits in AA. I thought it would rally big time today but after surging in pre-market it began to fade away. I closed out while it was trading up around 3% and cashed in big time.

I will wait for the next big opportunity.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Alcoa Trading Up. Cash Coming In.

I must thank Alcoa`s CEO for this awsome profit in the Alcoa stocks. Chief Executive Officer Klaus Kleinfeld tipped us off when he commented in Moscow that the industry outlook was getting much better in the day before the earnings conference call. What could we do with that information? Buy. And buy big. That is what I did. I did bet the ranch on this one and I will make a killing.

As Stanley Druckenmiller once said, "sucessful trading is about capital preservation and home runs." I am feeling like Babe Ruth today.

Alcoa traded above 10 in after hours trading.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Good Trading Opportunities: Alcoa, 2 Year Schatz And Natural Gas

I am pretty active today. After buying some Natural Gas yesterday to initiate a small trading position I sold short some Schatz 2 Year Futures for a long term structural position. This is a no brainer long term. I am betting that 2 year euro yields will be higher then 1.2%. Even if I have to wait for a big speculative profit on those contracts the carrying cost is pretty small.

I also bought some Alcoa (AA) stocks and I am going long into the earnings report. I have a third of a full position on and I am going to play it from here. I will add if I am proven right and retreat if the outlook is worse then expected and the stocks reacts badly tomorrow. Even though AA is trading at 1989 prices. Imagine that.

I am playing for position in these building trades. I am confident that as least one of them will be a home run.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Alcoa Will Start The Earnings Season. Eyes On The Outlook.

Alcoa will report its earnings later today but its CEO has made some very interesting comments yesterday in Moscow:

"Klaus Kleinfeld, chief executive of the U.S. industry leader, told Bloomberg Television he was "very optimistic" on sales as the Chinese economy and some U.S. industries start to recover.

"China is clearly out of the woods," Kleinfeld said in the interview in Moscow, where he and other U.S. executives were traveling with President Barack Obama. "Its economy has come back and is growing again,"

Kleinfeld said China had reverted to being a net importer of aluminum this year, buying 700,000 metric tons of the metal in the first six months, while demand was also strengthening in the U.S. and Europe.

"Things are bottoming out and they are even coming back in some sectors," he said, singling out an improving automotive sector in particular." in Reuters

Alcoa is one of my favourite stocks and I will certainly play it. I recall Jesse Livermore`s stock plays when he made a fortune out of a single stock trade. A well timed and leveraged trade is all we need to make a small fortune. Of course, it takes balls of steel and most people cannot handle it.

API Releases Inventory Data: Stocks Up

On the demand side, supplies may continue to rise on dwindling consumption as latest American Petroleum Institute data showed gasoline stocks gained by 767,000 barrels while distillate stocks rose by 3.416 million barrels in the week to July 3.

Later today the Energy Department will release its inventories data.

I am still holding to a very moderate bullish line in Natural Gas that I bought yesterday. I am not betting the ranch here, because Natural Gas is the most volatile future contract that I have ever traded and I do not want that position to disturb my regular trading activity.

By the way, Alcoa will kick start the earnings season later today. Alcoa`s CEO has made some bullish comments about demand from China and around the world yesterday in Moscow. Alcoa bucked the trend yesterday and ended the session on the plus column. I am very interested in AA`s earnings report and outlook.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Boone Pickens: Oil Will Go Back To 147 In 3 Years

T. Boone Pickens, the legendary oil man commented today that oil prices will trade at a new all time high and above last year`s record $147 a barrel in three years as producers fail to increase output. “We’ll be flat at 85 million barrels a year, by 2013 we’re going to see a decline in production. In 10 years we’ll be at $300 a barrel.”


Pickens, 81, one year ago started a $60 million promotion for a national energy plan that relies on domestically produced natural gas to cut U.S. dependence on foreign oil. Without a switch to gas, the U.S. will be spending $2 trillion a year importing oil, he said.

“The problem is we don’t have the oil,” Pickens said. “And we’ve got gas coming out our ears.”

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Recent Marc Faber`s Comments On Natural Gas

Natural Gas is the most “undervalued” commodity, investor Marc Faber said in an interview with Bloomberg Television on May 27.

"Peak oil is a reality. It does not mean that prices will go up in the immediate future. There are other sources of energy like nuclear and Natural Gas. Natural Gas is the most undervalued commodity right now."

Natural Gas futures were trading at around 4.00 at the time. They sold off over 15%.

I bought Natural Gas today for a small trading position. I might add a bit more if it keeps selling off. Off course this will not be the absolute low for Natural Gas but it seems a good price to initiate a speculative position.

US Natural Gas Fund Cannot Issue More Shares Without Authorization

This was the reason UNG was suspended earlier today,

"The United States Natural Gas Fund will temporarily suspend issuing new shares pending regulatory approval to expand the number of shares it can issue to 1.2 billion, the company said in a filing with the U.S. Securities and Exchange Commission on Tuesday.
The U.S. Natural Gas fund , also known as UNG, filed on June 5 with the SEC for permission to issue 1 billion new units, adding to the previously approved 200 million units.

The SEC has not yet approved the request and a spokesman for the agency said the SEC has no comment.

The UNG fund tracks the price of natural gas futures on the New York Mercantile Exchange, providing a way for smaller, retail players to invest in commodities like gas by buying shares in the fund without worrying about margin calls associated with futures trade if their bets go wrong.

The long-only exchange traded fund's move to massively expand the number units it can issue has sparked concerns among market players who say the jump in the number of units may open the natural gas market to more speculation and influence prices when it rolls positions on the futures market from month to month.

On Monday, UNG had 32.1 million units left of the 200 million it is authorized to issue. By Tuesday, all of those units had been issued and UNG suspended the issuance of "creation baskets"—UNG's term for blocks of 100,000 units.

The suspension of issuing creation baskets will have no effect on the ability of authorized purchasers to redeem baskets of units, the company said in its Tuesday SEC filing." in CNBC

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Buying Natural Gas

Natural Gas is so oversold that I bought a few future contracts to my trading account at 3.45. I don`t know for how long I will be in this trade because I will consider this more of an investment then a short term trade.

But if happens what I am expecting to happen (the mother of all short covering rallies in the Natural Gas Futures) then I will be forced to sell if the profit is big enough.

Recently Marc Faber and Jim Rogers talked bullish about Natural Gas. Off course long term Natural Gas should rise, I don`t have any doubts about that. So, I have the long term confort of buying a valuable asset that is currently undervalued.

But I have the same dream as every other trader, that is, after buying, I want the market to be gentle right away. So if can make a big short term profit, the better. Otherwise I will sit on it, "Jim Rogers style".

I did a nice quick systematic trade on the S&P Futures earlier today. Sold some contracts at 890 to close them at 885. Just to pay the rent.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Volume Is Anemic In The US Stock Market

Bespoke has a very interesting article on the anemic volume of the US stck market, "Using the S&P 500 tracking ETF (SPY) as a proxy, the 50-day average dollar value of volume in the ETF has declined by 54% since its peak last Fall. It is also currently at its lowest level since the S&P 500 peaked in October 2007."

In the graph below we can see the drop in the dollar volume on the SPY.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Closed My Short S&P Futures.

I closed my short S&P position at 892 with a 30 points profit. This was one of my best leveraged trades of 2009. I was waiting for a 880 test or break and it seems that he had a test. At least for now.

I think the stock market is at an important crossroad. I am neutral and I will wait for further info in order to go long or sell short again.

I will leave you with another great trading quote from the Way Of The Turtle, "Trading is not a sprint; its boxing. The market will beat you up, screw your head, and do anything it can to defeat you. But when the bell sounds at the end of the 12th round, you must be standing in the ring in order to win".

Now its time for me to enjoy my Port Wine. I will read a few more pages of The Way Of The Turtle, a very good trading book for everyone and specially for systematic traders.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Head And Shoulders Formation On The S&P. Will We Break 880?

The Bespoke Investment Group website mentioned today the popular Head & Shoulders formation developing on the S&P 500, "market technicians are focusing on the head and shoulders formation that could spell trouble if the 880 support level on the S&P breaks. Art Cashin of UBS mentioned it this morning on CNBC, and below we provide a chart showing the head and shoulders pattern. The textbook suggests that a break below the support level shown in the chart spells doom for the market going forward."

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Good Trading Quote From The Book I am Reading

I really enjoyed this passage from Curtis Faith in the "Way Of The Turtle", "Good trading is not about being right, it is about trading right. If you want to be sucessful, you need to think of the long run and ignore the outcome of individual trades".

Very good material.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Still Short S&P Futures. Can We Break 880?

I am still short the S&P Futures I have sold last Wednesday at 922. It was a no brainer going short into the Employment Report after the ADP and the Challenger jobs data. It really paid off.

I will see how it deals with the 880 mark. If it does not break I might close shorts.

As I wrote yesterday, I am re-reading "Way Of A Turtle." This is one of my favourite quotes from that book, "Good trading is not about being right, it is about trading right. If you want to be sucessful, you need to think of the long run and ignore the outcome of individual trades".

Oil keeps selling off, day after day. I have no position in oil. Its a pitty, because I saw it coming all the way. But I am getting all that I can with my big short S&P Futures. My trading account will make a new 2009 high today.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Great Trading Book: "Way Of The Turtle"

This weekend I re-read the "Way Of The Turtle" while I was lying around the swimming pool. The "Way Of The Turtle" is a fantastic trading book from Curtis Faith, one of the original turtles. I read it last year but I really enjoyed this re-read. Perhaps because I am doing a lot of systematic, system generated trades these days.

Trading coach Van K. Tharp considered it one of the best five trading books ever written and I agree with him. This is a look at the legendary Richard Dennis`s Turtle Traders and his famous trading experience. Curtis Faith was the most sucessful member of this elite group and he describes the trading experience like a seasoned writer. Great trading book.

On other topic, I kept my short S&P Futures position from Thursday and I am almost 30 points in the money. My trading account made a new high for the year last Thursday and I will close this discretionary trading position in the next few sessions because I will focus again on my systematic trades. Opportunities like that, going short into the Employment Report, do not come often and as Stanley Druckenmiller once said, "trading is about capital preservation and home runs". This was a very leveraged trading position and a decent home run in my trading account. Its time to protect my equity, placing only some very risk limited systematic trades for the next few trading sessions.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Shorted S&P`s At 922. Going Short Into The Employment Report

Yesterday`s ADP Employment Data was pretty bearish and after a brif uptick, markets sold off. I had a sell stop at 922 and I went short on the S&P Futures. I am going short into the Employment Report with a protective buy stop at 925. I am risking only 3 S&P points in this short term trade.

I had a very good trading session in the Oil Futures yesterday. I sold short 4 times during the trading session for a cumulative 2 full points on the traded contracts. I am at peace with my oil trading for now but I will trade again today if the opportunity presents itself.

I wrote a on a small Post-It on my trading desk, "I am just playing odds, very good odds as a matter of fact". This is to encourage my systematic trades that are on balance more profitable and more relaxed then my usual big discretionary trades. But I am an economist, I can`t help but making some macro calls on the economy, oil and the stock market.

The truth is that I like to mix them. When I am reading the markets well, discretionary trading is unbeatable. I make much more money that way then trading any system. But when I am tired or I cannot follow the markets through the trading day or when I am not reading the markets so well, I system trade. We always need to do what is fitting us best.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Hugh Hendry On Inflation Concerns

"I think this paranoia today that inflation is happening today I think it puts in place a motion for a decline in the economy," Hendry said. "I think they're not printing enough money… with regards to the wealth destruction that has been happening over the past 18 months."

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Crude Oil Inventories Fell 3.7 Mln Barrels

Crude inventories dropped again last week, though gasoline stockpiles continued to rise as refineries increased output, the government said Wednesday.

Crude inventories fell by 3.7 million barrels, or 1 percent, to 350.2 million barrels, which is 18.3 percent above year-ago levels, the Energy Department's Energy Information Administration said in its weekly report.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Oil Had Its Biggest Quarterly Rise In 19 Years

Nymex Light Sweet Crude Oil Futures jumped 41 percent in the second quarter, the biggest since 1990.

This rise was not driven by demand at all. This is the reason why some many great traders were caught on the short side of this trade.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.

Oil Inventories Will Come Out Later Today: A Drop In Inventories Is Expected

According to a Bloomberg survey the Energy Department report today will show crude-oil stockpiles dropped 2 million barrels last week. Yesterday the industry-funded American Petroleum Institute said crude supplies fell by 6.8 million barrels.

“It was an extremely huge stock draw,” said Hannes Loacker, a Raiffeisen Zentralbank Oesterreich analyst in Vienna. “If we get confirmation of that data in the Energy Department, that will help prices. Stocks have come down in the past month, so that’s at least one positive fundamental.”

“A fall in crude inventories will cause the market to move higher,” said Mike Sander, an investment adviser with Sander Capital in Seattle. Should the government report also show a decline, “it will reinforce crude to stay at or go above current levels,” he said.

New York oil jumped 41 percent in the second quarter, the biggest since 1990.

Oil Trader`s Blog is a website for active online futures and stock traders. I will provide my real time trading decisions and my market thoughts on this webpage.