Market Recovers In Late Trading. A Japanese Opportunity?

Another disappointing session end for the bears. Its quite frustating to be short this market and then see the market climbing its way up in the final hour of trading. I have a reason for this behaviour. Its the desperate fund managers that are out of stocks and find themselves forced to come in at any price. This will cost them dearly pretty soon.

We are in the distribution phase. Smart sellers are feeding asinine buyers. I am keeping my short line but I have to say that I am quite frustated with today`s pattern.

Besides this trade, I was pretty active trading the Euro Dollar currency pair. I extracted 50 pips with my intraday countertrend system.

Marc Faber commented friday that, "I think that at worst the (japanese stock) market isn`t going to do anything. But obviously the market can have quite a rally for the simple reason that we are still very low in terms of share prices in Japan". I think medium to long term investors will be rewarded if they buy the Nikkei 225 or the iShares MSCI Japan Index (ETF) (NYSE:EWJ). I agree with Marc. The worst thing it can happen is flat 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.

China Sells Off 6.75%. Are We Headed For A Correction In The US?

The chinese stock market keeps falling apart with the Shanghai Composite tumbling over 6% overnight. Things have been rather quiet at this side of the globe but I am expecting a severe correction to unfold in the next few weeks strarting now.

S&P Futures are trading down 6 points and I have shorted some contracts on Globex. I am expecting market softness so we all should put our red ships in the water.

Risky assets like oil are also trading lower this morning. This correction will probably be widespread affecting most commodities also.

Today I will trade listening to one of my favourite alternative rock bands. The Band Of Horses are a bit melancholic, but I really love their subtle and powerful sound. Have a good trading 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.

Speculators Dominate Oil Futures Market

A new paper by Rice University’s Baker Institute for Public Policy shows a clear increase in the size and influence of noncommercial traders, or “speculators,” in the oil futures market since regulations were eased by the Commodities Futures Modernization Act of 2000.

Speculators now constitute about 50 percent of those holding outstanding positions in the U.S. oil futures market, compared with only about 20 percent prior to 2002. The report also finds that the correlation between oil and the dollar has strengthened significantly over the past several years.

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.

Be Patient And Wait For "The Big Opportunity"

I have said on this blog time and again that patience is one of trader`s biggest assets. Jesse Livermore wrote in his book "How To Trade In Stocks", "In the long run, patience counts more then any other single element except knowledge. The two really go hand in hand."

Its important to be patient in the trade selection process, to be patient and wait for those situations that come along very rarely. The march low in the stock market was obviously one of those situations and the Euribor low may very well be the next big evolving trading opportunity. I have spotted the opportunity and I hope I will be patient enough to sit on this position for a big move and have the courage to add when the markets prove me that I am right.


I am sure we all do hundreds or even thousands of trades per year. But the reality is that the ones that really count for the best or for the worst are relatively few. We have to focus on those.

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.

Early Strength On Futures. I Am Staying Out.

Techs are trading in the green today but I don`t expect markets to go much higher from these levels. I am not shorting yet, I will wait a bit and see how it develops.

I barely slept again, as I stayed awake through the night trading EUR/USD in the forex market. It has been a good experience for me trading this system at such late hours.

I had a bit of a violent move against me when the dollar sold off more then 125 ticks but I managed to stay the course and fade minor moves through the globex session and end the forex session in the plus column. I am a bit tired today so probably I will watch this market from the balcony.

Oil is up again, benefiting from the recent dollar weakness. I am waiting for a good opportunity to return to oil futures trading. Maybe I will short it if it becomes a little bit more overbought.

While I traded at such late hours I watched 4 or 5 episodes of my favourite TV Series on DVD. The Entourage guys, Vince, E, Turtle and Drama are nearly broke in this fifth season as Vince is unable to find a job in the movie industry. I love them.

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 Day. Closed Shorts And Bought Stocks For Intraday Plays

Very good trading day. I was able to spot the market turnaround and I closed by shorts at 1020 and made two good guerrilla trades on Apache (APA) stock and on Hecla Mining (HL) shares.

I was fast, decided and made the right calls at the right time. I am feeling in the zone.

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 Sharply. Still Short On The S&P Futures.

It seems that a correction is beginning after 2 days of good economic data and a market that is unable to rally even with better then expected news. I am keeping my moderate short line opened yesterday at 1025.

Oil is also under pressure and Natural Gas is selling off like crazy. I urge to check the contango in the Natural Gas Futures calendar. The November futures are trading at 4.11 versus 2.71 for September Futures. That is a 51% price difference. I think its almost impossible to trade a commodity that shows this erratic behaviour. I am deleting Natural Gas from my trading screens.

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 Will Not Return To 75 Dollars a Barrel Soon

A return to the 10-month high of 75 dollars a barrel hit recently looked increasingly remote after the EIA reported a 100,000 barrel increase in U.S. oil inventories. Inventories are about 15% higher than they were a year ago, while demand was down 0.9% in the four weeks ended Aug. 21, the department's EIA said. Analysts had given an average forecast for a 600,000-barrel drop, according to a Dow Jones Newswires survey.

I had a decent trading day extracting more then 70 pips on the EUR/USD currency pair, fading minor moves early in the morning. I am keeping by big short position on Euribor Futures and I am slightly off the money on those. But I am sure that if I am patient enough and if I can sit tight on these contracts I will make a killing, sooner rather then later.

I have also opened a very moderate S&P Futures short line as I perceived the market internals to be soft today. I am short at 1025 and I expect this position to return to profitability tomorrow.

Today I will begin watching the 5th season of my favourite TV series, Entourage. I bought the DVD and I will watch one episode a day before going to sleep. Me and my wife are big fans of Vince, E, Drama, Turtle and their easy lifes. You can visit the TV series official site here. For those who are not familiar with the series, I highly recommend it. You will have the time of your life watching these 4 guys cruising through life.

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 Reappointed. Fasten Your Seat Belts, We Will Crash Into Inflation.

Ben Bernanke was reappointed today as Fed Chairman. Barack Obama said, “Ben approached a financial system on the verge of collapse with calm and wisdom, with bold action and out-of-the- box thinking that has helped put the brakes on our economic freefall.”

That is all very well. But the second chapter of this long novel will be the inflationary repercussions of these unprecedented events. I predict very high inflation, a currency crisis devoloping over the next 1 or 2 years or sooner as things appear to happen at ever faster paces.

Ben Bernanke will probably keep interest rates too low for too long reflating asset bubbles everywhere. In this scenario, and of course this is a medium to long term macro call, commodities will probably perform better then any asset class and bonds will be crushed.

I haven`t decided if I am going to play this macro call or if I will remain trading only short term time frames. I am confortable trading EUR/USD and S&P Futures in a systematic way but I will probably add to my long account some Silver, Hecla Mining (HL) shares and Natural Gas to add to my 3 Months Euribor Futures. A short position in long term government bonds is also a distinct possibility. But I will keep my trading account separated from this long term plays as I don`t like to mix different styles in a single trading account.

The comments have been pretty active lately and we have built a fantastic trading community on this webpage sharing wisdom and trading perspectives in real time.

I have been sharing with you some of my favourite music artist but today I will introduce you to my favourite painter. Mark Rothko`s paintings are one of the most beautiful things ever made on this earth. I wish I could afford a few canvas on my walls. In 2007 one of his paintings was sold for over 72 milion dollars...

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.

Quick Scalp on the S&P Futures. Opened A Major Euribor Position.

Its was a rather quiet trading day and I was patient enough to wait for my system to quick in shorting at 1032.50 (as I posted in the comments section) and I stood patiently while the market reversed course and traded my way for most of the evening. It was an easy 7 points profit on those E-Mini S&P Futures on a rather moderate line. Nothing to write home about but it felt good to be back to my trading desk on a winning mode.

But more importantly then that I opened a major long 3 month euribor trading position, shorting the 3 Month Euribor Liffe Futures. This position has some cost of carry (which I always hate) but has one of the most spetacular risk / reward trade-off that I have ever seen. Euribor rates can`t go much lower then 0,82%, can they? The ECB and Jean Claude Trichet do not have the similar dual mandate that the Federal Reserve has and their only concern is price stability.

They will withdraw the extra liquidity measures as soon as the euro zone shows some signs of economic life. And by then it will be too late to play this trade out. Note that this a similar trade then the one I have been in and out over the last few months using the 2 Year Schatz Futures. When I think about this trade I always recall Jesse Livermore words, "the big money is on the big swing". It sure is, but the ability to sit tight on a major position is much more difficult then it seems.

For you to gain some perspective I have posted this euribor price chart for the last year. Quite impressive, not?

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.

Back To My Trading Desk.

Finally I am back to my trading desk. After more then 2 weeks out taking care of my newborn Enzo I am back to action.

I have been looking into the Euribor Futures as a similar but probably more effective way of playing the imminent rise in european interest rates. The ECB is much more hawkish then the FED and they will begin tightning at the smallest hint of economic strength.

More on this later. Now its time to work. Have a good trading 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.

Natural Gas - Oil Ratio Hits 19 Years High. Time To Play It?

The ratio of crude oil to natural gas futures prices on the NYMEX reached its highest level in over 19 years during friday's trading session. Natural Gas is trading at lows not seen since August 14, 2002. At the current levels, the ratio between both commodities stands at 25 to 1.

Looking at data going back to early April 1990, the average ratio of crude oil to natural gas futures prices stands at 9.38. After many traders got burned playing this spread early in the year I think its time to give it a shot. The only thing that holds me back a bit is the extreme contango on Natural Gas Futures and the consequent cost of carry. But the contango is probably near its high for the time being and may come down a bit.

This trade can be done with a long short ETF play, short United States Oil Fund (USO) and long United States Natural Gas Fund (UNG) or with a pure long short futures play, short CL Futures, long NG futures. If your patient and if you can sit tight on a volatile position, in other words if you are not afraid of a financial rollercoaster, then this trade has very good money winning odds.

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.

New Highs For The Year. Faber Was Wrong.

A report showing strong sales of existing homes boosted investors' hopes for a U.S. economic rebound, sparking rallies in stocks and crude oil to new highs for the year on Friday.

All four major stock indexes have hit new intraday peaks for 2009 and are also on pace to post their highest closes of the year if their recent gains hold through the closing bell.

I am happy I closed my shorts early in the week at such a low level. In retrospect I should of closed short and reversed. But I will not do any discretionary trading over the next few weeks unless a big, major opportunity develops. I will be back at my trading desk on monday ready to use and abuse my intraday trading system on the S&P Futures and on Forex.

Have a nice weekend. Try to relax and chill out to come back strong and energised next week. I will leave with another music suggestion: Nouvelle Vague. Sofisticated and trendy.

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.

Marc Faber Thinks We Already Saw The Highs For The Year

Marc Faber was interviewed yesterday and made some very interesting comments about the US stock market, "I would not be surprised if the early August highs were actually the high for the year."

Besides he is bullish on the US Dollars and predicts a rally in US Bonds, "I think, for the next one to three months, bonds could rally somewhat and the dollar could recover somewhat."

Marc was dead right on calling the March bottom and has had a good "feel" for the market through out the year. Is he on the money this time?

Have a good trading 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.

Oil Remains Just Below 2009 Highs

Crude oil futures settled higher today, just below its 2009 high. Light sweet crude futures for September settled 0.12 cents higher at $72.54 a barrel on the NYMEx. The September contract expired at settlement, with the bulk of trading revolving around October futures, which settled 92 cents, or 1.3%, lower at $72.91 a barrel.

Crude futures have now ended the last two days perched just below a 10-month high, with traders lacking the final motivation to push prices beyond the 2009 peak of $72.68 a barrel, set June 11. Oil prices have more than doubled from lows hit early in the year, at the nadir of the global economic downturn, but have resisted additional moves higher while the U.S. and other major economies continue to struggle.

Oil prices made a rare deviation from equities on Wednesday, when the Department of Energy reported a massive 8.4 million-barrel drop in U.S. oil inventories last week. Last week's inventory drawdown came as owners of oil on tankers took advantage of the wide gap between September and October futures by holding off from delivering their crude to shore. The October contract's discount to November is less than half as wide, which could send oil flooding to shore in the coming weeks.

"It's not a supply play at this point, it's more of an economic play, oil and equities have been pretty highly correlated for the last four to six months, I wouldn't call (the connection) dead because for two days they traded uncorrelated." said Zach Oxman, managing director of TrendMax Futures.

I tooke advantage of the fact that I am out of the market to go out and see a beach house. I am taking advantage of the depressed prices in the real estate arena to buy a new beach house. I found a very good one today in a good condo with a fine swimming pool and with a fantastic oceanview. I will try to close the deal next week. It seems that my Ferrari will be kept on hold.

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.

Initial Claims Will Set The Tone For Today.

First-time filings for state unemployment benefits rose by 15,000 to a seasonally adjusted 576,000 last week, marking the highest level in initial claims since July 25.

Both initial claims and continuing claims ticked up in the latest readings, indicating that it's still very tough to find or keep a job. The four-week average of initial claims moved to its highest level since July 11, rising by 4,250 to 570,000.

I think this will set the tone for today`s stock market action.

Oil is also looking toppy to me. I will initiate a marginal short line to extract the fattening contango. Its more of an yield play then a speculation on lower prices. Nymex Crude Oil front month futures are trading at 72.45 versus 73.44 for the October future contract.

I suggest you to listen to this powerful alternative rock band to energise you to the trading session. The National are my favourite band.

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 Shorts. Back To Systematic Trading.

A great veteran trader once told me that there are only 3 or 4 great macro trading opportunities each year and the best we can do with our money in those in between times is to stand still. Stanley Druckenmiller also says that trading is a combination of capital preservation and home runs. I agree with them. Discretionary traders cannot be all the time in the market because sooner or later they will burn out. I will take advantage of this new equity high to switch off from discretionary trading for a awhile until I see, or I think I see a great trading opportunity.

Meanwhile I will trade my intraday system in the S&P Futures and on EUR/USD. It suits me at the present time because I will be back full time on my trading desk next week but I will still have some (Enzo) tough nights.

I took some time while I am at home helping with the baby to enhance and validate some of the components of my system. It has been working well for me over the last few months and I will use and abuse it over the next few months.

Besides that I will be also back to my Guerrilla Trades, intraday plays on some sectors and individual stocks following the institutional investors money flow.

Warren Buffett wrote today on The New York Times some very bearish comments on the dollar:

In The Greenback Effect, Buffett details his ongoing warning that the "enormous dosages of monetary medicine" being used to rescue the U.S. economy will eventually produce a dangerous "side effect."

He worries there won't be enough borrowers ready and able to absorb the nation's growing debt relative to its economic output over the years, forcing Washington's "printing presses" to work overtime churning out paper money.

All those "greenback emissions" will, he fears, feed potentially "banana-republic" style rates of inflation.


This is pretty hard writing by Warren. He has certainly sharped all his pences to write this article. But he may very well be right. Some silver stocks like Hecla Mining (HL), Novagold (NG), or the silver ETF itself (SLV) may very well be good inflation protection plays. They are still cheap and have not run as the rest of the commodity pack since March.

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 On The S&P Futures. Natural Gas Will Trade Below 3.00 Today.

Natural Gas has been selling off violently and will certainly trade below 3.00 dollars today. A violent snapback may occur at anytime now.

S&P Futures are trading at 977 and I am still holding to half of my short position. It would be perfect if we had a wide range down day today.

The 2 Year German Schatz futures are rallying today on the inflation data coming from Germany. They are very near the point I referenced for shorting but I will wait a little bit more. If the stock market correction keeps on going Schatz will probably trade a bit higher from these levels.

Remember that EIA oil inventories will be released later this morning. Yesterday`s API inventory data was very bullish and caught markets by surprise. Let`s see if there is any confirmation on today`s report.

I have suggested you to listen to Jose Gonzalez. Its my favourite artist at the present moment and I like to trade and to analyse the markets listening to his music. My favourites are "Down The Line" and "Killing For Love".

Have a nice trading day. Put your helmets on because we can have pretty good swings 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.

Outlook On Oil, Schatz. Plus, A Little Appetizer.

Art Cashin mentioned today that we will have a very exciting period for the markets, "We could see perhaps historic trading over the next eight weeks or so." Art Cashin cited the Baltic Dry Index and the questionable economic data coming from China as warnings for an imminent fall. Art with all due respect has been mostly wrong since the march lows and he keeps repeating himself. But even a broken clock is right twice a day and this may very well be the case for Mr. Cashin.

I am glad I closed half of my short S&P position yesterday and I am disappointed with today`s action. Lets see how it goes tomorrow but I am ready to run away from the market with the rest of my profits in my pockets. I am planning a trade on the Schatz Futures, a play on 2 year german interest rates on EUREX. I have been shorting and covering Schatz over the last few months, been able to extract a lot of euros from that market. Its one of my favourite markets and I have a very good track record playing this contract. I am looking forward to open again, preferably to short above 108.20. Even though I think the current level (108.06) is already a very good starting point for shorts.

Did you see the rally in oil today? Big upmove, reversing almost all the losses from previous sessions. I plan to short a small line in oil in order to extract the contango in that market. The contango is nearing 2 dollars per contract which is pretty fat. Its a 3% monthly rolling yield for shorts. So, what that means is that crude oil has to rally over 3% per month for you to lose money. Its a decent proposition at least as far as I am concerned.

Now, one little appetizer. Check out questa macchina. Its the fantastic Ferrari California. Visit this website and be marvelled with this beauty. Go to the configurator on that site and choose Rosso Corsa for the outside color and Crema on the Trim. That would be my choice.

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.

Velocity Of Money. Reduced My Shorts By Half.

I found this very interesting article about the velocity of drug money:

"Up to 90 percent of paper money in the United States contains traces of cocaine, according to a study by the American Chemical Society released Monday. Scientists analyzed currency in more than 30 cities in five countries, and the US and Canada posted the highest levels of contamination, according to the study. China and Japan posted the lowest levels of contamination, between 12 and 20 percent." in CNBC.com

This is astonishing regarding that less then 2 or 3% of the population consumes cocaine. Imagine the importance of this "black industry" in the US Economy.

Back to the markets. I closed half of my shorts at 978 with a very pleasant 30 points profit. I will keep the remaining position because I still expect lower prices but this sell off has been pretty severe already. Things will be choppier going forward, the easy short money has already been made.

Have you noticed Natural Gas? Its trading again at multi year lows. While I expect that the fundamentals will improve for natural gas, as more and more utilities turn to this cheap energy source, the 10% month rolling yield kills any bullish initiative. The contango is always very high on natural gas because of the expensive storage costs, but a 10% per month rolling yield is pretty extreme. Otherwise I would buy a bit for the long account, Jim Rogers style. A long term buy and hold. But with this contango I cannot do it.

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 Bleeding. I Saw This Coming.

Party time, folks. Markets are extending friday`s move and my short S&P Futures position is now more then 25 points in the money. I have a decent position on but I wish I had more.

Once again patience payed. Markets were way, way overextended and the smallest catalyst would send the markets tumbling. You didn`t need to be a wizard to foresee this one.

I am holding for lower prices but I will move my stop decisevely lower. Have a nice trading 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.

Oil Weakness Expected

Crude oil futures sank more than 4% Friday, settling $3.01 lower at $67.51 a barrel on the NYMEX. This was the lowest finish since July 30. Market participants say there is a potential for prices to fall as quickly as they did in early July, when crude shed almost $10 in nine sessions:

"I see the same downside risk that we had in the first couple weeks in July, when we had a combination of weaker equities and a lack of physical tightness to cushion the decline," said Tim Evans, an analyst with Citi Futures Perspective.

Demand for crude oil remains depressed in U.S., according to the latest EIA data. Crude oil inventories have risen for 3 straight weeks, while refineries are operating at their lowest level relative to capacity in 25 years amid slack gasoline demand.

"A lot of people were calling for a lower price because fundamentals are weak," said Tony Rosado, broker at GA Global Markets. "The $65 price becomes an attraction now."

"The price that clears the market in crude oil is probably around $58-$59 dollars a barrel based strictly on the fundamentals," said Jim Ritterbusch, president of Ritterbusch and Associates.

I agree with this bearish view. I expect crude oil to trade lower or in a trading range over the next few weeks. And the contango is attractive to place a moderate 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.

VIX Signals Downleg On The S&P 500

VIX signals a possible downturn for the stock market going into September:

"Options traders are increasing bets that the steepest rally in the S&P 500 since the 1930s won’t survive September, historically the worst month for U.S. equities. Traders are betting the VIX, a gauge of expected stock swings, will increase 13 percent in the next five weeks, according to futures prices compiled by Bloomberg. That’s the biggest spread since August 2008, before the S&P 500 suffered the steepest two-month plunge in 21 years. The indexes have moved in the opposite direction 81 percent of the time over the past five years, Bloomberg data show." 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.

Krugman Says The Recovery Won`t Be Fun

Paul Krugman says the worst is over, but the recovery won't be fun: "'We have managed to avoid a second Great Depression ... but full recovery is at least two years and probably more,' Krugman said. "Asia is likely to see a faster rebound, than the U.S. and Europe, partly driven by the recovery in manufacturing exports."

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.

Investors Are Still Bearish On The Stock Market: What Does It Mean?

Interesting market sentiment survey I found on Bespoke Investment Group website. Retail investors are mosly bearish on the stock market.

Yesterday we asked readers whether they thought the S&P 500 would be higher or lower than it is now at the end of the year. Since yesterday's close, the "lower" response has been tracking at about 55%, which is surprising given the rally the market has had since the March lows. This type of negative sentiment in a rising market is definitely something the bulls like to see. in BIG website

Keeping My Shorts Into The Weekend. Placed A Stop To Secure My Profits.

It looks like the correction is on its way, finally. I am keeping my shorts into the weekend with a stop for all my futures contracts that guarantees me a profit. I am playing a winning hand from now on.

Once again, patience paid. Patience is one of the best assets of a profitable and knowledgable trader (definition of patience on Wikipedia: is the state of endurance under difficult circumstances). Patience kills any amateur trader but greatly enhances the performance of a professional speculator.

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.

Bought A New Cellphone. I Am Going Back To Nokia. Are NOK Stocks A Buy?

I noticed some strong moves on some on my pet stocks like Hecla Mining, Alcoa and US Steel. These were the stocks that I bought in late February and in early March and I rode them through the initial stages of this surge making a killing in all of them. I interpret these moves has a "inflation fear" surge. The fear is as Marc Faber said yesterday that "the FED will keep interest rates artificially low for far too long".

But the problem is that these stocks had quite a move and have discounted a lot of recovery hopes. The only thing I think is still a bit undervalued and may surge in the next few months are agriculture commodities. DBA might very well be a good play for the long account.

Regarding my trading positions, I am keeping my short lines on the S&P Futures because I still see the market way overextended and with no catalysts going forward. But I am holding moderate lines, I am not betting the ranch by any means. I will let these summer noise weather down and I expect to be at my trading desk late next week.

By the way, I lost my cellphone on the day Enzo was born. I had a HTC Diamond that I simply hated and now I bought a Nokia 5530 XpressMusic. Its very, very cool. Its fast, user friendly and has a very good design. This is not a NOK stock buy recommendation but I think many people will slowly get back to Nokia after bad experiences with HTC, Blackberry or IPhones. Nokia`s are always user friendly and fast and in the end that is all that matters, isn`t it?

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 Market Update

Oil rose for the first time in five days trading alongside equity markets.

“The market continues to trade on economic optimism and not supply and demand. We had a much weaker dollar and a strong stock market today, and that brought buyers back in. The Federal Reserve said the economy is doing much better and the end is near on incredibly easy money.” said James Cordier, a portfolio manager at OptionSellers.com in Tampa, Florida.

Crude oil for September delivery rose 0.71 dollars to settle at $70.16 a barrel on NYMEX.

“I think the market continues to track like the equities, and the turnaround in the S&P has helped boost crude back up above $70,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.

“The market is still looking for direction, and what it really wants to know is where is the dollar going, and where are the stocks going?” said Carl Larry, president of Oil Outlooks & Opinions LLC, a Houston-based energy adviser. “Short-term, we’re going to watch the dollar. Long-term: The recovery.”

IEA Ups Energy Demand Outlook

The world will need an average of 85.25 million barrels of oil a day next year, 70,000 barrels more than previously estimated, the IEA, adviser to 28 nations, said in its report today. Outside emerging economies such as China, “industrial production growth remains firmly in negative territory, even though the pace of decline has somewhat slowed,” the IEA said in the report. “More worryingly, industrial production has seemingly not reached the bottom in the U.S.”

EIA Inventory Data: Crude Stocks Rise More Then Expected

Refiners cut operating rates by 1.1 percentage points to 83.5 percent of capacity, the lowest since May and Oil supplies increased by 2.52 million barrels to 352 million in the week ended Aug. 7, the Energy Department said. Inventories were forecast to climb by 1 million barrels, according to the median of analyst estimates in a Bloomberg News survey.

I am slightly bearish on oil prices going forward and I may open a very moderate short line to take advantage of the fattening contango.

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.

Said And Done. Re-Shorted The S&P Futures @ 1008.

As I wrote in the morning I closed in Globex and re-opened my S&P Futures short line after the FED Statement. It worked nicely for me as I pocketed more then 10 points on the move and some more as the market reversed and closed near 1002.

I have been unable to follow markets through out the day because of my newborn and I am obviously far from my trading desk. But I am keeping in touch with market action 3 or 4 times a day including Globex (when I am forced to wake up late at night to feed the baby) and I analyse market action and market related news after the market closes.

I plan to keep these shorts for a while and I would not be surprised if this year`s highs were set in August.

Marc Faber said today that, "I expect fot the next couple of months a period of a recovering dollar and a correction time in asset markets." 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.

Markets Dress Up To The FED

The market is dressing up for the Fed meeting. Its pretty common for the market to trade up until the Fed releases its statement at 2.15pm. So I closed my S&P shorts in the Globex session and I will re-open them just before 2.15 pm. It never pays to go short on the day of the FED because they always dress the market up for the event. I managed to close them at 992.

I am sorry for not being able to post when I made that move but Enzo does not give me time for anything and I could not sleep properly for the last 6 nights. Anyway he is doing fine and I love him more then anything.

PS: I will re-open short after the Fed statement. There is a strong probability that they can begin to withdraw the excess liquidity.

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.

Time To Short 2 Year Tresuries?

I found this very interesting comment from a chief market strategist FED and interest rate policy.

“We think the Fed will take [interest rates] to almost 7 percent by the second quarter of 2011. That’s based on weak GDP and continuing deterioration of the dollar, which is inflationary.” John Lekas, CEO and portfolio manager of Leader Capital

This is probably a good time to think about shorting 2 Year Treasury Futures. The Federal Reserve is holding its 2 day monetary policy meeting today and tomorrow.

Stock market is trading red and I expect some more softness. I am still holding my short lines.

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.

Krugman On The Economy

Nobel laureate Paul Krugman commented today a second stimulus package, the japanese lost decade, the job market and the prospects for the world economy.

"The world economy needs a second stimulus if it is to avoid the fate of Japan in the 1990s when the country was stuck with years of sluggish growth, Nobel laureate and professor of economics Paul Krugman told CNBC Monday.

"The good news is that it does not look like the 2nd great depression. For a few months it did," Krugman said.

All indicators now point to the fact that the plunge has stopped, as jobs in the US are lost at a smaller pace and manufacturing and services seem to be stabilizing worldwide, he added.

But the sources of future growth are hard to pinpoint as the financial crisis has left the world with excess capacity and the possibility of high unemployment everywhere, according to Krugman." in Bloomberg

Markets are trading slightly down in a boring summer session. I have been short and wrong for a few trading sessions but its quite amazing that even with all this bullishness my contracts are only 10 points off the money. Lets see how this plays out over the next few sessions. Markets are still in a historical overbought situation and I expect the market to trade lower over the next few weeks. Have any of you traded the Schatz? It turned out to be one of my best trades in the last few months. Off course it was a very leveraged and risky play, but it went well all along.

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.

Back To My Laptop. Mild Correction Expected On The S&P.

I am back home with my newborn and my wife. Everything went well and I thank all of you for the kind support and to Teddy for keeping the blog running during trading hours.

I am back with my laptop and I will resume posting today. Regarding market action, I took my profits in the Schatz Futures with a huge gain after the better then expected economic data printed late last week. But I still think the stock market is prone to correct in a mild or severe way shortly. I am keeping my short lines on the S&P Futures. I plan to resume trading only my S&P system because I will have a tough time dealing with the newborn and I will be able to fully concentrate on trading for a few weeks.

I did some adjustments to the system that was already performing quite well and I am looking forward to trade it again.

As someone once said, "there is more to life then trading". I agree. But I am eager to get back to my trading desk. You know what I mean. Have a good trading session.

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.

Enzo Has Arrived. Best Trade Of My Life.

Enzo was born yesterday evening and today is my birthday. Can you imagine a better birthday gift? Everything went well and Enzo and his mother are doing great. We will return home on Sunday.

This event was surely a new emotional high for me and the adventure is just beginning.

Regarding market activity I saw that futures came down a bit and are trading near 990. I am keeping my short lines on the S&P Futures and on the Schatz Futures, where I have reduced my size and took some profits. I can`t have huge positions in the next few weeks. But I am confortable keeping my shorts on the stock market because this rally has overextended itself and as El Erian says, "the market is on a sugar high".

I will resume posting very soon, but I am sure Teddy will keep his "trading highlights" going, keeping the fire on this website.

Have a nice trading day and go beat the street.

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.

Stiglitz Says The Recovery Will Be Very Slow

Stiglitz was on Bloomberg TV earlier on and here is the recap of what he said about the state of the US economy:

"Nobel Prize-winning economist Joseph Stiglitz said he expects a “very slow recovery” in the U.S. economy and that a replacement for Federal Reserve Chairman Ben S. Bernanke should be considered.

“There are lots of potholes in the road,” Stiglitz, a Columbia University economics professor, said in an interview today with Bloomberg Television today. “There are problems in commercial real estate. We know that there will be more foreclosures in the mortgage market” and “we know we don’t know the state of the banks.”

Policy makers are seeing the first signs of a recovery from the worst economic slump in the post World War II era, and the risk of further shocks as unemployment approaches 10 percent. Credit markets are improving and yet “the fundamental problem of lack of aggregate demand is still there,” Stiglitz said.

“It’s going to be a slow, very slow recovery,” said Stiglitz, 66, formerly chief economist at the World Bank and chairman of the White House Council of Economic Advisers under Bill Clinton." in bloomberg.com

Will Cisco Kid Set The Mood For A Correction?

I think this bull run has already lived through all its seven lives. Maybe Cisco Kid can set the tone for tomorrow and all we need to begin a meaningful correction is a wide range day down. Maybe we will get it tomorrow. Cisco Systems is trading down over 3% in the after hours session.

I am short S&P Futures and I am being very patient with my short lines. Off course that the profits from my short Schatz position are smoothing the path and I can wait for the obvious correction patiently. As Jim Rogers usually says, "nothing goes straight up or straight down" and we will have a few dozen points correction.

The fundamentals have certainly improved a lot, but will they keep improving or are we going to dip again? One way or another markets are prone to a mild or severe down leg.

David went to Dave Matthews Band concert and I plead guilty to jeaulousy. I would love to be there jumping and shouting, "All the little ants are marching. Red and black antennae waving. They all do it the same. They all do it the same way." Go Dave!

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.

How Severe Will The Market Correction Be?

This is the price graph of this recent run up on the S&P 500 Index. The stock market moved up more then 120 points in 17 trading session without any pullbacks. This is obviously prone to a correction that can be soft or pretty severe. If the market corrects a third of this move, it will trade down to 960. That is my target for the next few trading weeks.

Yesterday I picked up Fooled by Randomness the magnific book written by Nassim Taleb. I underlined this passage that I think its particularly interesting, "over a short time increment, one observes the variability of the portfolio, not the returns. In other words, one sees the variance, little else". Off course we are traders and we are used to attribute meaning to every single price move, to every single trading session. Sometimes its important to gain some perspective.

Have a nice trading 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.

API Inventories Released: Crude Stocks Fell 1.5 Million Barrels

U.S. crude futures rose in post-settlement trading on Tuesday, after industry data showed a surprise drawdown in crude oil inventories last week against the forecast for a stock build. Earlier, NYMEX September crude settled lower for the first time in four sessions on profit-taking ahead of supply data.

The API said that crude stocks fell 1.5 million barrels to 350.9 million barrels as imports dropped sharply. Distillate stocks declined 1.0 million barrels to 157.9 million barrels and gasoline supplies rose 2.1 million barrels to 215.7 million barrels, the API said.An expanded Reuters poll of analysts forecast an 800,000-barrel build in crude stocks in the week to July 31. The poll also predicted a 1.2-million barrel rise in distillate stocks and a 1.0-million barrel drop in gasoline stocks.

Tomorrow the EIA will release the "official" weekly inventories but the fact is that oil already had a very nice run and is prone to a mild or severe correction. I would not buy a drop of oil here.

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 Is As Overbought As You Will Ever See It.

This is the most overbought market I have ever seen. I have seen several times similar stretched situations but always on the downside like in March where the markets were equally oversold. But the fact is that I have been short the S&P Futures for the last few trading sessions and I am only losing 10 or 12 points. So I am only a session away from being in the money again.

Check the market situation for yourselves. I expect a meaningful correction that can take us to 940 in 2 or 3 trading sessions.

I am not a pure technical trader by any means. But I cannot overlook such an extreme technical situation.

Have you listened to Jose Gonzalez? I find his music inspiring and I like to listen to this sound during trading hours. My favourite is "Down The 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.

Dr. House Is Going Nowhere. 2 Year Schatz Shine.

Dr. House is pretty tired and he and his cane are going nowhere. We are in the summer dollrums, and the S&P is very quiet. I don`t expect much for the remaining trading session and I keeping my S&P shorts for a few more rounds.

The 2 Year Schatz Futures keep performing beautifully. Its has the potential to turn out to be one of my best trades this year. Its doing very well so far.

I will end the session richer then I began no matter what Dr. House decides to do on the way home.

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.

The S&P Resembles Me Of Dr. House

The S&P was beginning to look like DR. House. He can walk but he cannot run. As you know I am short S&P Futures at 987 and I am not worried a bit because Dr. House cannot run away from me. I will catch him whenever I decide to get up and run. And it seems that will happen today because markets are looking very soft in pre-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.

Crude Oil Trades At 10 Month Highs

Oil and natural gas futures prices rose sharply today on the weakening dollar and on new signs of life from manufacturers that suggest the recession may be near the end. NYMEX Crude Oil rose 3 percent, over 2 dollars a barrel to settle at $71.58 a barrel. It was the third straight day of substantial increases on the energy futures markets and the first time in a month that crude traded above $70. Crude oil is trading near to a 10 month high.

After being short and wrong in the april-may oil rally I have been avoiding oil and focusing my trades on the S&P Futures and on the european interest rate complex.

Contango is geting fatter again so I can try a small short line in the near future but for the moment I am watching oil from the balcony.

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 Is Resilient. Still Short.

It was a decent day all together. The Schatz Futures were crushed today (it was even better then I had wished for) and the S&P`s kept rising offsetting the P&L.

No big deal. I am keeping my short lines for the imminent market correction. Having a moderate short line I can seat patiently while other traders still feel this market has upside potential.

I am feeling pretty relaxed today. If you have a few minutes to spare check Jose Gonzalez myspace. Great musician and very good sound to go with trading during the session.

I took part of my day to enhance my S&P trading system. I have been around it trying to improve the position size algorithm. I want to make sure that I can win over 80% of the trading sessions and that I won`t lose more then 3 average profit days in a session. After Enzo`s birth I will give it a run for its 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.

ISM Data Comes Better Then Expected. Bonds Sell Off.

The ISM Index came above expectations but the Prices Paid Index shoot up to 55. Bonds sold off on the news and I think that will drag the S&P Futures lower. I am keeping my 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.

Time To Do A Test Buy on Natural Gas?

Natural Gas Futures are once again hovering near a multi year low. The million dollar question is: "Is this the bottom for Natural Gas?"

I don`t know. I wish I knew. But what I know is that Boone Pickens canceled a wind farm because natural gas was so cheap that utilities were using it to produce energy. This means a lot. Natural gas is becoming the cheapest source to produce energy and Nat Gas is trading at a very high historical multiple to oil futures. The case is strong for Natural Gas, at least longer term.

The thing is dislike about holding natural gas futures is the extreme contango. Rolling it over month after month will just kill you. You need Natural Gas to go over 40% in a year just to cover the contango. Nobody can stand that. That is why UNG, United States Natural Gas Fund has performed so badly.

So, natural gas has to be played for short term spikes or needs to be deleted from the trading platform. I think more money has been lost in Natural Gas then in Las Vegas this year.

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.

Greenspan Says The End Of The Recession Is Near

Alan Greenspan, the ex-Chairman of the Federal Reserve made some interesting comments regarding the health of the US economy. Alan Greenspan highlighted the sucess of the cash for clunkers program that shows that the economy is picking up.

"Former Federal Reserve chairman Alan Greenspan says the economic downturn is not quite over but that the end is nearing.

Greenspan says that the health of the financial system has improved significantly. He says the collapse of the financial system is "off the table" after the system teetered for a while.

Greenspan expects unemployment and job losses to continue but at a slower rate.

The former Fed chief says the overwhelming response to the "cash for clunkers" program shows that confidence in the economy is picking up. The program gives car owners cash incentives for trading in older, less fuel-efficient cars for more efficient models.

Greenspan appeared Sunday on ABC television's "This Week."" in CNBC.com

Lets see how the markets reacts to its current overbought siuation. I am expecting the S&P to trade lower this week even if it goes up monday or tuesday. As Jesse Livermore used to say, "the big money is on the big swing". I am going to play the big swing on the short term interest rates through 2 Year Schatz Futures.

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 Believe Short Term Interest Rates WIll Come Up And Stocks Markets Will Trade Lower

As you know, I am shorting the S&P Futures and also shorting the 2 Year Schatz Futures, the 2 year german government futures. This is how I am going to play the next few weeks. My son will be born any day now and I am playing for the intermediate term because I may not be able to trade for a few days or weeks. I plan to be keep my trading platform shut down for the first 2, 3 weeks after Enzo`s birth.

I am going to a music concert tonight, trying to chill out a bit and re-energise. This week was more intense then the last and I feel that is because I traded in a discretionary way, leaving my S&P Futures system "off". I had commented on that earlier. Its much more tirying to trade this way. But its my natural style and I feel that when really opportunities present themselves nothing beats discretionary trading.

I am sensing two good intermediate term opportunities. The first is to short the stock market and the second to play the rise in german short term interest rates. The ECB has a single mandate and that is price stability. Jean Claude Trichet will begin hiking at the slighest inflation warning signals. We are not seeing any inflation in the Eurozone for now but I am pretty sure that short term rates will begin to trade up very soon. Check the 2 Year Schatz price graph to gain some perspective on its historical range.

This may be one of the greatest opportunities for the remaining of 2009. I won`t let it go by.

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.