Bear Takes The Stage.

Well, well, well. It seems that the "Bravo`s" and the "Encore`s" by the bulls are over now. The bear will now take the stage.

While I had a decent week I have the sense that I could have done more. I should have risked more because these volatile markets are perfect for my systems. I will try to make it up next week, because I do not like to leave any money on the table. When things are going our way, we want all that is coming to us, and more.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Paul Tudor Jones: Buy Gold

Paul Tudor Jones told his clients that the time to hold gold is now as faster inflation and increased purchases through exchange-traded funds and by central banks boost demand amid stagnant mine output.

“I have never been a gold bug,” Jones told investors in an October 15 letter. “It is just an asset that, like everything else in life, has its time and place. And now is that time.”

“As one would expect, rising inflation suggests higher gold prices, especially when the Fed is perceived to be behind the curve,” according to the letter. “Gold appears to be cheap. In our view, gold’s value should increase as its scarcity relative to printed currencies increases.”

Paul Tudor Jones identified gold, emerging market equities denominated in local currencies and commodity related stocks as among the most likely assets to perform best.

Central banks were net buyers in the second quarter for the first time since at least 2000, according to the World Gold Council. While metal exploration expenditure has increased, mine production has been “stagnant” the past decade and new output is “marginal” in terms of available supplies, according to the letter.

“Any incremental demand for gold must be met through sales from current owners,” the company said in the letter. “They just aren’t making that much of it anymore.”

Related Assets: SPDR Gold Trust (ETF) GLD

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Bulls Go Shopping In The Bears Supermarket.

I found this loveable cartoon and I just had to post it.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Who`s The Best?

The Oracle of Omaha retains his pre-eminence as a market visionary, outshining a new wave of financial strategists and the best-known central bankers.

Billionaire investor Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., is regarded as the best assessor of financial markets by a plurality of almost one-fourth of respondents to the quarterly poll of investors, traders and analysts who subscribe to the Bloomberg terminal.

The closest runner-up, Bill Gross, the founder and co- chief investment officer of Pacific Investment Management Co., is chosen by 16 percent. Billionaire investor George Soros gets 10 percent, followed by Nouriel Roubini, the New York University professor who in 2006 predicted the financial crisis, and Marc Faber, publisher of the Gloom, Boom & Doom Report.

Fewer than 1 in 10 cited Federal Reserve Chairman Ben Bernanke, despite high marks for his performance as a central banker. Only 3 percent pick Alan Greenspan, the former Fed chairman. Of course, Teddy, David O., Payline and Fresbee were not in that poll, otherwise they would have given Warren a run for his money...

Have a good trading day.

Tomorrow`s Economic Data:

Personal Income and Outlays
8:30 AM ET

Employment Cost Index
8:30 AM ET

Chicago PMI
9:45 AM ET

Consumer Sentiment
9:55 AM ET

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Today`s Best Performing Stocks.

Markets were a bit stretched on the downside and the better than expected GDP data fueled a big rally on stocks and commodities in general. Best performers today on the stock market are American Superconductor Corporation (AMSC) up 18.10%, AsiaInfo Holdings, Inc. (ASIA) up 17.17%, CARBO Ceramics Inc. (CRR) up 16.33%, and Lincoln National Corporation (LNC) moving up 15.89%.

Best commodity performer is Oil, moving up almost 3 dollars or 3.6%. My system reversed from short to long on this big volatility expansion. "Dollar is King" and with the US Dollar moving lower 135 pips the rally is widespread.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

General Electric Stock (GE) Down 10 Days In A Row

Interesting note on General Electric (GE) stocks:

"Two days ago we noted that General Electric (GE) had been down eight trading days in a row. After two more days of losses, GE has now crossed into double-digit territory. GE is currently tied for the longest losing streak in the Russell 1,000 along with Con-way Inc. (NYSE:CNW), Greenhill & Co., Inc. (NYSE:GHL), and Intersil Corporation (NASDAQ:ISIL).

Since 1980, GE has only had one other losing streak of ten days or more." in Bespoke

So we can have a decent bounce anytime now.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Is The Risk Trade Over?

The US dollar rose Wednesday for the fourth straight session against the euro. Stocks markets keep selling off.

Is this a signal that the risk trade has ended?

This only the second time the S&P has grazed the 50 day moving average since July, writes Miller Tabak equity strategist Peter Boockvar in a trading note out today. “The risk trade is taking a breather coincident with a U.S. dollar rally,” he wrote.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Good Trading Day. Markets Selling Off.

Nice trading day today. No mistakes, good setups on both systems and a very nice P&L at the end of the day. Its much easier to trade when volatility picks up.

Oil Futures and stock markets keep selling off as the US dollar keeps rallying and some analysts are already calling for the end of the risk trade. I will keep taking it day by day, following my systems and setups, trying to achieve a good and consistent profitability trading session after trading session.

Goldman Sachs (GS) lowered its GDP forecast to 2.7 percent from 3.0 percent. It did so after the release of the durable goods report, which showed that new orders for manufactured goods rose 1 percent in September. Goldman said in a research note that while the headline gain in orders was in line with expectations, the numbers weren't as good as it had expected.

And if Goldman is a seller, markets will hibernate. Like a bear.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Dollar, Equities and Commodities

I am happy to be back to my trading desk full time after a few days on the road for some business presentations. Markets are printing red early in the morning and as I read the business media this morning I found this interesting call on the US Dollar by Jim Rogers:

A rally in the dollar may last for “a while” as equity and commodities markets decline, said Jim Rogers, chairman of Singapore-based Rogers Holdings.

“Everybody is pessimistic on the dollar,” Rogers said in an interview with Bloomberg television in Singapore. “Whenever you have everybody on the same side of the boat, you know what you have to do. We may have a rally in the dollar, a decline in commodity prices or stock prices for a while.”

We have said here time and again that the US Dollar is "The King", the way the dollar goes, other asset classes will follow. So if the dollar rallies for a while, as Jim says, we can expect a tough period for commodities and stocks in general here and abroad. Is he right on this call?

Have a nice trading day. Keep the commenting section alive and kicking as it is the soul of this website.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Trading Thoughts.

"There is no such thing as being right or beating the market. if you make money, it is because you understood the same thing the market did. If you lose money , it is simply because you got it wrong. There is no other way of looking at it." Musawer Mansoor Ijaz

I will be back to my trading desk full time tomorrow.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Still Short Oil. Sticking To My Guns.

Crude oil futures slid more than 2%, below 79 dollars a barrel, after trading as high as 81.58 in early trading. I was lucky that this early action did not trigger my reverse short to long stop, as it was placed at 81.75, just a few ticks above. I was short from Friday at 79.89 and I enjoyed today`s downtrend.

The institutional desks guys all had their view on the oil drop, but I am sticking to my guns and I am trading it only with my algorithmic trading signals.

For instance, Samarjit Shankar, managing director of global FX strategy said, "You do have an overall reversal in risk appetite. It's primarily a lot of profit-taking on long risk positions and some hesitation on the part of market participants ahead of the (third-quarter U.S. gross domestic product) number that's going to come out this week". Whatever. I am staying short until my trading system signals a reversal and for that to happen oil has to rally. Otherwise I am keeping my shorts.

"They say there are two sides for everything. But there is only one side to the market and is not the bull side or the bear side, but the right side!" Remember these wise words? Well, I am re-reading this masterpiece and the trading results are in. My best trading sequences always came right after I read my bible. This time will not be different.

Meet The National, my favourite alternative rock band. This is "Apartment Story".

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

My System Got Me On The Right Side Of The Oil Market. Good Trading Day.

I was offline for most of the session and I am happy to see that I am winning big time on my short oil trade. My system is definitely starting with the right foot.

Volatility seems to be increasing and a VXX (Vix Volatility ETF) long play may be interesting.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

A Good Economic Calendar.

I suggest this economic calendar to all readers. Its the one I normally use and its the best I came across online:

Econoday: Economic Calendar

I will be offline for most of tomorrow and tuesday trading sessions because of some business presentations. I will log in for the final trading hour if I can. I sense a rise in volatility on the horizon. We will have some very interesting trading sessions ahead.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Financial Suicide.

"Most good traders would agree that risking less than 1% of equity in a trade (where 1% is the amount you lose if your stop loss was hit) is a prudent risk. Risking between 1 and 3% gets into the gunslinging range. Risking any more than 3% is usually financial suicide, and the average trader commits financial suicide all the time without knowing it"

Van K Tharp, IITM

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Oil Trading System Starts Trading. Goes "In The Money" For The Weekend.

I spent the last few days preparing everything to start with the oil trading system and I finally got started today. I sold oil at 79.89 reversing the system`s last buy signal. So, I will go short into next week with a reverse to long "buy stop" at 81.75. This is a mini-trend following system so we can expect many small losses and a few big gains down the road when oil gets traction either way, up or down.

So it was a busy day today but profitable and I had a good week overall, specially on the Dax trading system that added over 100 points per contract traded with 4 profitable trading sessions out of 5. I am feeling very focused and motivated about trading. I am looking forward to the next few trading weeks.

By the way, Monday and Tuesday I will be absent for most of the trading session as I scheduled some business presentations. I will try to log in early in the morning or at the closing bell.

The last video was very popular, so today I will post a fantastic strike from Zizou. I am a big soccer fan, what about you?

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Back To Oil Futures Trading. Orders Are In.

Crude oil is trading slightly above 81 dollars a barrel on NYMEX, poised for a 4th consecutive week of gains.

Light Sweet Crude Oil futures has advanced 4% this week as equities gained on better-than-estimated company earnings and as the dollar declined against the euro this week, adding to the appeal of commodities as an alternative investment.

“On the economic recovery, it’s three steps forward one step back, an uneven recovery but the worst is over,” said Gordon Kwan, head of regional energy research at Mirae Asset Securities in Hong Kong. “We are seeing more recovery in areas dedicated to exports to China. The structural trend for oil is still up.”

The Bloomberg pool of analysts is bearish for next week as, 50% of the analysts said oil will drop through Oct. 30, 33%, forecast that the market will rise and 17% said prices will be little changed. Last week, analysts were split over whether prices would rise or fall. Well, they were wrong. No surprises there.

U.S. crude oil stockpiles rose 1.31 million barrels to 339.1 million last week, the Energy Department said in a report Oct. 21. The gain left inventories 9.4% above the 5 year average for the period.

As I said yesterday I have completed some research on oil prices and I will begin trading on it. Its a very short term orientated trading system that tries to catch above normal prices fluctuations, thus a mini trend following system. The strongest conclusion of this research is that oil has to be traded on the direction of its trend, whether its short term or long term. Price persistency in that market is way above normal, and way, way above ramdom.

The last trading signal was a buy at 80.50 that I could not follow as this research was not yet ready or fully operational. The next signal will be a sell, for the time being around 79.75. Orders are in, let the party begin.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Didn`t Do Any Trade Today.

It was a quiet day for me with no trade setups and I even left the office earlier than usual to play a soccer match with some friends. I was surprised when I checked the quotes and saw that markets rallied into the close. But I had no interest in it so it was just a matter of habit to check the quotes as did not plan to get involved either way.

Tomorrow I will get back to my Dax Futures and to my EUR/USD cross plays if some setup evolves.

By the way, My oil futures trading research is ready to be converted into real trading action. I won`t be able to trade full time on Monday and Tuesday as I scheduled some business presentations so I may start with this oil futures venture no later than Wednesday.

Speaking of soccer I will leave with an amazing goal by one of the best footballers of all time.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Is China Telling Us The Truth?

Does anyone believe in these numbers coming from China? They are questionable at the very least...

"China’s economy expanded at the fastest pace in a year as stimulus spending and record lending growth helped the nation lead the world out of recession. Gross domestic product rose 8.9 percent in the third quarter from a year earlier, the statistics bureau said in Beijing today." in Bloomberg

Have a good trading day.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Late Day Reversal. I Had A Very Good Day.

The late day reversal on the US stock market probably caught many bulls off guard. But this type of action could have happened at any of the previous sessions with the market being as stretched as it was. Is this a meaningful reversal? Maybe. Its early to tell.

But I am fighting other battles these days and I daytraded the EURUSD cross on the long side for a 40 pips profit and traded the DAX for a 65 points profit. It was a really good trading day for me. And even better than that I left the office holding no positions at all, so I can rest properly and do not need to think about trading after hours. That is invaluable.

Today I got my Montblanc pen back. This pen was a valuable birthday gift from my parents and I only like to write with this pen. Its not really a lucky pen but if anything it can only bring me good fortune. I dropped it a few weeks ago and I had to get it fixed. Now its as good as new. I am a Montblanc fan. You can check its pen collection or writing instruments as they call them, here.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Fatherhood Implied A Change Of Tactics. Good Feedback.

I have changed my tactics recently and some members of this community have posted some interesting comments about the possible reasons for that change. First of all, it was not deliberate. Second, it wasn`t overnight.

Kaleb, commented yesterday:

"Sounds like your trading systems are "arriving" at the perfect time for you and your family. Allows you to handle "family things" that always crop up with a newborn. Thank-you for your valuable tips."

He is right. I think that is the main reason. My former approach/metodology wasn`t working for me. It was a high risk, high pressured trading style (some around here called me the Titanium Balled trader) that will only work if you are totally focused and reading every piece of information because you are always on the edge. It was not fitting my new role as a father. I think that this responsability slowly began to affect my trading and I needed to shift to a approach that fits me at this moment of my life. Now, I am feeling relaxed and trading profitably. That is all I need right now. I do not feel the need to hit that amazing "home run". Not right now.

I would also like to add the nice advice from Tzimtzum:

"I am watching you evolving AE (after Enzo) and it is very good to see. From me an extra one - however busy you are, however hectic the markets, however much money can be made, make sure you make space every single day, at dinner time, sitting at a table, to have conversation with your family. A very wise successful man told me this when my 1st was Enzo's age and it was the best advice I ever had. Be well."

I think this advice is for all members of this community. Trading is a fantastic endeavor, but there is more to life than trading. We can never forget that.

By the way, Teddy keeps hitting it right and has a huge following on this website. His focus is the S&P short term direction and he updates his perceived market direction in real time. A good help for stock market traders in general. Keep up the good work Teddy.

Have a nice trading day. Keep us posted on your moves through the commenting section.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Relaxed Trading. Reasonable Profits.

It was a very relaxed day today as I played my Dax Trading System and added a daytrade on the forex market, shorting EUR/USD for a 40 pips profit. It wasn`t a major bet, but it definitely was an easy win. I sold the EUR/USD cross when the dollar made new intradays highs and the trade was always in the money for the rest of the trading session. I was really trying to let my profits run, but the trend ended soon and all I could make was 40 points after being up more then 70. But it was a good, flawless play.

I am enjoying this relaxed, distant approach to the markets. What I like best is the ability to leave the office and have no worries at all about the impending market direction.

The market, the S&P to be more precise, made another "failed" sell-off today. It seemed early in the morning that we could have a triple digit loss in the Dow, but the dip buyers came in once again and held the market. Where have we seen this before?

One last note on oil. Oil futures couldn`t hold the 80`s mark and reversed slightly over the course of today`s trading. I am getting ready to play oil again. But I will play in the only way that I think its possible to play it nowadays: with a smart mini trend following system. More on this on future posts.

I will leave you with a fantastic band, Sigur Ros. Enjoy.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Volcker Warns The Fed. Another Up Day? Maybe Not.

Paul Volcker, the ex-FED Chairman that killed inflation in the early 80`s and now an economic advisor of Barack Obama warned of the risk of not withdrawing the excess liquidity in a timely manner:

The enormous amounts of liquidity pumped into the U.S. financial system by the Federal Reserve are not inflationary "at the moment" but will become so at some point, Paul Volcker, the former Fed chairman and a White House adviser, said on Thursday.

Volcker, now an economic adviser to President Barack Obama, said it was difficult, but necessary, to start draining the billions of dollars in liquidity even while unemployment rates remained high as the U.S. battles out of recession.

The pre-market is green on the S&P Futures but being as stretched as we are, we can have an intraday reversal. Actually those sudden reversals from "overbought" levels, or after a big upmove if you prefer, are one of my favourite setups. I like to sell them when the program trading guys are kicking in and we can see "lines of red" flashing on my trading platform. My platform highlights the intraday high and lows with a flashlight. That way its easy to see if the programs are dumping shares at a fast rate or not.

I will trade today listening to Bush, a powerful rock band from the 90`s. I usually only listen to recently released albuns but this is an exception. Maybe I am feeling revivalist today.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Another Day. Another Rally.

Sometimes it seems that the S&P 500 is headed towards 1500 or even 1800 in a couple of months. It goes up every single day, and is up in 9 of the last 10 trading sessions. Quite remarkable. I am pretty sure of one thing. This will end in tears for those who came late to this rally.

Perhaps a big shorting opportunity is just around the corner but for the time being I am focusing on my Dax Trading System and I can leave the office early and don`t give a damn about the market`s future direction. That is precious to say the very least.

So, my trading day was confined to my Dax system. Boring but profitable. I caught the upmove in the morning, got caught in an intraday false reversal and finally went long to the close. So I am a few dollars richer, in this case, euros.

I will recommend you my favourite music artist. Jose Gonzalez has a subtle and quite addictive sound. You can visit his myspace, here.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Trading Rules That Work.

As I was preparing a presentation about systematic trading for some corporate clients, I came across a paper written by Van K. Tharp, Ph. D.. I found this part very interesting:

"Consider the trading rules that work: 1) Follow the trend; 2) Let profits run; 3) Cut your losses short; and 4) Manage your money so you can stay in the game. If you design something around the following rules, you`ll make a lot of money."

I think it summarizes very well what good professional trading is all about. Have a good trading day.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Paul Tudor Jones Movie (All Videos)

This is the Paul Tudor Jones movie. It is defenitely worth viewing. Tudor Jones was of the traders interviwed on The Market Wizards. His chapter was entitled, "The Art Of Agressive Trading".

Video 1

Video 2

Video 3

Video 4

Video 5

Video 6


These are my favourite Tudor Jones quotes:

"By watching Eli, I learned that even though markets look their very best when they are setting new highs, that is often the best time to sell. He instilled to me the idea that, to some extent, to be a good trader, you have to be a contrarian"

"First of all, never play macho with the market. Second, never overtrade"

"I spend my day trying to make myself as happy and relaxed as I can be. If I have positions going against me, I get right out; If they are going for me, I keep them."

"Risk control is the most important thing in trading"

"Dont ever average losers. Decrease your trading volume when you are trading poorly, increase your volume when you are trading well. Never trade in situations where you don`t have control. For example I don`t risk significant amounts of money in front of key reports, since that`s gambling, not trading"

"If you have a losing position that is making you uncomfortable, the solutuion is very simple: Get out, because you can always get back in. There is nothing better then a fresh start."

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Meredith Whitney And Art Cashin Talking Bearish Once Again.

Meredith Whitney made some bearish comments on the US economy in general and on small businesses in particular:

Credit continues to contract, and smaller firms and many consumers are suffering, notes bank analyst Meredith Whitney.

“With the exception of large-cap companies, smaller-sized businesses are struggling to raise capital and the wider implications for the economy are bearish.

“Small companies employ 50 percent of the U.S. workforce and contribute 38 percent to GDP, or Gross Domestic Product,” Whitney says.

I also found some interesting comments Art Cashin made on Friday about a possible top in the US stock market:

"It indicates "a top being formed,” he said. “The rally yesterday putting one more new high for the year came with more declines than advances, and declining volume outstripped the advancing volume. Those are the kinds of divergences that you don’t want to see and it doesn’t give you a lot of faith in the rally.”


I am writing from my new beach house for the first time. I think this place will real inspire me in the future. Its great to be out of the city, even if its only for a couple of days. No Belgian Beer today, but I am looking forward for a magnificent Port Wine at sunset. Enjoy your weekend.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

I Am Back To Active Trading. Good Trading Day.

After a trading pause to take care of some personal affairs and to finish some trading systems research, I was back to active trading today. I am using my newly developed HMS Dax Daytrading System and I am already on the right track. I sold the DAX Futures early in the morning at 5858 and caught most of the session`s downtrend for a nice profit.

I took all my trading knowledge and lots of testing hours into this development. I think I have a powerful and robust automatic trading strategy to guide my trades for the months ahead. I will pause my discretionary trading for a while. Maybe forever if this system proves to be nearly as good as it performed in the Lab.

I am tasting a good belgian beer to officially start my weekend. My favourite belgian beer is Judas, as you know, but now I am drinking a very tasty Chimay. I can`t wait for next week as I am feeling excited about my system`s performance. An automated Oil Futures approach will be my next endeavor. After all, this is the Oil Trader`s Blog, isn`t it?

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Is The Oil Rise A Simple Dollar Story?

“We’ve broken this year’s high on improved sentiment after the drawdown in gasoline inventories. But inventories did not decrease due to rising demand, which is still weak, so the risk is we revert to a 68-75 dollar range.”

Eliane Tanner, commodity strategist at Credit Suisse Group AG

Well, I think everybody knows that this recent rise in oil futures is basically due to a very weak US dollar. At least, most of the institutional comments on the oil prices seem to reflect that view.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Bullish Call On The Japanese Yen

The forex traders may find these comments from a japanese chief srategy very interesting:

The dollar may drop to 50 yen next year and eventually lose its role as the global reserve currency, Sumitomo Mitsui Banking Corp.’s chief strategist said, citing trading patterns and a likely double dip in the U.S. economy.

“The U.S. economy will deteriorate into 2011 as the effects of excess consumption and the financial bubble linger,” said Daisuke Uno at Sumitomo Mitsui, a unit of Japan’s third- biggest bank. “The dollar’s fall won’t stop until there’s a change to the global currency system.”

The cross is now trading at 90.50 so this japanese strategist is predicting quite a rally for the yen. On top of what we have already seen. Is this the equivalent of last summer`s 200 dollars a barrel call by Goldman Sachs just before the crash?

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Oil Futures Jump To A New 1 Year High.

Crude oil futures jumped to a new 1 year high Thursday, just above 77 dollars a barrel after a sharp drop in U.S. gasoline stocks buoyed the market.

Light, sweet crude for November delivery settled 2.40 dolars, or 3.2%, higher at 77.58 a barrel on the NYMEx, having peaked at an intraday high of 77.97 dollars a barrel.

Data released Thursday by the U.S. Department of Energy showed a sharp 5.2 million barrel drop in gasoline, far from the 700,000-barrel increase analysts surveyed by Dow Jones had expected. Distillate stocks, which include diesel and heating oil, fell 1.1 million barrels against expectations of a 100,000-barrel decline, helping to trim stocks that still remain at their highest levels in over two decades.

The stock draw was the catalyst for oil futures to extend their run past 75 a barrel, a price that had until Wednesday not been breached this year.

While the market now eyes 80 dollars a barrel as the next barrier for oil to break through.

Apart from oil, the veteran trader, Art Cashin commented today`s economic data on CNBC earlier today:

“If you put things in perspective, initial jobless claims mean people who just got laid off and it’s over 500,000 and it keeps going. At some point, you’re going to have so many people laid off that the claims have to go down because there’s almost nobody left to fire so you have to be careful of looking at that number. It’s still eating away. This is going to be a long, hard slough—this is not going to be a V-shaped recovery.”

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Cognitive Biases That Affect Traders

Humans have weaknesses that hamper their trading capabilities. Many were developed in ancient times and were important for survival. I will enumerate the most important:

1) Loss Aversion: the strong tendency for people to prefer avoiding losses over acquiring gains

2) Sunk Cost Effect: The tendency to treat money that already has been committed or spent as more valuable than money that may be spent in the future

3) Disposition Effect: the tendency for people to lock in gains and ride losses

4) Outcome Bias: The tendency to judge a decision by its outcome rather then by the quality of the decision at the time it was made

5) Recency Bias: the tendency to weigh recent data or experience more than earlier data or experience

6) Anchoring: the tendency to rely too heavily, or anchor, on readily available information

7) Bandwagon Effect: the tendency to believe things because many other people believe them

8) Belief In The Law Of Small Numbers: The tendency to draw unjustified conclusions from too little information

All traders have in one or another time been affected by one or several of these biases. Its easy to make mistakes when you are under pressure and dealing with money. As Jesse Livermore once said, above all other things we have to guard against ourselves.

By the way, I have finished the decoration on my beach house. We chose a very clean concept with all furniture in white. The seaview is awsome and I think this new house will really inspire me in the future. I am having a great time with my family and I am loving the experience of being a father. Enzo is by far my best trade ever.

I have been lacking form in the markets recently but I have not lost any significant money. That is not bad for any dry spell. Anyway I have been taking some time off for some research and I am building or rebuilding a few trading systems. I am gaining confidence in one of them in particular and being as agressive as I like to be when things are going well for me, I am antecipating some great trading days in the weeks ahead.

Don`t let them beat you. And as we heard time and again on Hill Street, "be careful out there".

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Intel Beats The Street. Trades Higher.

The world's largest maker of microprocessors forecast that its gross profit margins for the fourth quarter will reach 62% of revenue, plus or minus 3 percentage points. Intel (INTC) made that forecast in releasing its third-quarter results, in which it blew past Wall Street's estimates for earnings and revenue. Intel traded up 4% in after hours trading to 21.40.

Will this report set the tone for tomorrow? The market is a bit overbought but it seems it may very well assault the 1080`s very soon.

I will have to go to my new beach house tomorrow, so I will probably be offline most of the trading session. I am sure that I will be back full time by Thursday. Anyway I will keep an eye on the markets through my MacBook.

In the energy complex, Crude oil rose to a seven-week high in New York on speculation world energy use will grow as the economy rebounds and as a weaker dollar spurs commodity demand. The OPEC increased its 2010 global oil-consumption forecast on economic expansion in emerging economies. Oil gained 1.2% and gold rose to a record as the dollar fell to the lowest level against the euro since August 2008.

QualityStocks left a new music suggestion on the last post comments section: Harlem Underground Band (Blues / Down-tempo). I will hear it later today.

Have a good trading day.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Is The US Economy Better Then Expected?

I mentioned Jim Rogers yesterday and I will mention him again today. Jim is in New York and he made some very interesting comments about the US economy:

"I thought things would be worse in New York. It's good to see the economy is better than I thought it was"

That is certainly a surprise. A bullish statement on the US economy from Jim Rogers is something to take into consideration. You can watch his full video interview to Yahoo Finance`s TechTicker here.

No important earnings releases today but we will have Intel (INTC) reporting tomorrow after the bell.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Jim Rogers Sees Opportunity In Shorting The US Bond Market

Jim Rogers spoke at the ETF Securities sponsored event and made some very bearish comments on the US government bonds.

After the Reuters interview, Rogers said at a seminar hosted by ETF Securities that the bull market in U.S. Treasurys has come to an end.

"The next bubble that I see developing is in the United States government bond market. It is inconceivable to me that anybody would lend money to the U.S. government for 30 years in U.S. dollars at 3 to 6 percent interest rate," he said. "So, somewhere along the line, this bubble is going to pop. If any of you own bonds, I'd be terribly worried, I would think about getting out of the bond."

The 10 and 30 Year Government Bonds Futures may very well be a good short, but they are surely way, way down from their highs made last December. While it may still work, the time for this short probably came late last year or in January.

But Marc Faber and Jim Rogers agree on this one. Faber even said recently that this will be the short of the century...

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Market`s Price Earnings Ratio

As some members of this community were discussing Price Earnings Ratio`s (PER`s) on the last post I thought it was interesting to post here an article I found on Bespoke Investment Group:

"As shown in the table at right, the P/E ratios of the S&P 500 and its ten sectors have jumped significantly since the March 9th low. As the market has rallied sharply, earnings have not been able to keep pace at all, hence a rising P/E. While P/E expansion is normal during a bull market, at some point investors will need to see earnings catch up. This will result in P/Es stagnating or even declining even as the market climbs. Obviously if earnings don't begin to grow as analysts are expecting, the market will have a tough time remaining in rally mode.

The S&P 500's trailing 12-month P/E is currently at 20.13, up 101% from its level at the market bottom on March 9th. The P/E ratio for the Materials sector has jumped the most since 3/9 at 239%, followed by Industrials (+113%), Technology and Energy (+90%)." in B.I.G.

You can read the full article here.

Earnings season will be on full swing this week and there will be plenty of opportunities ot make money.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

What Is Good Trading All About?

"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 outcomes of individual trades" in Way Of The Turtle

I think we should all print this sentence and place it on our trading screens. The recency bias is the tendency for individuals to place greater emphasis on recent more data or experiences. A trade made today weights more heavily then do trades made last week or last month. Two months of losing trades can count as much or represent something like 6 months of winning trades that happened previously.

Today I sold some S&P short in the beginning of the trading session when the us dollar was making new highs and crude oil was turning negative after being up all morning. The Us dollar and Crude Oil are 2 of the indicators I normally use on my S&P trading decisions. With the info I had, the shorting was a good trade. In similar circunstances I would do the same trade again.

The end result? I lost 4 points on the S&P. Did I do anything wrong? No. Business as usual. It was just another trade. One in over a thousand that I probably already made this year. Does it matter at all? No. Should I be annoyed with it, angry, obsess over it or going to my weekend thinking about it? No. There will be plenty of more losing trades down the road. And many spectacular winners too.

Have a nice weekend.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Art Cashin Comments The Dollar Decline

Art Cashin, director of floor operations for UBS Financial Services, offered CNBC his market insights. Is the sliding US dollar in a "disorderly decline"? Cashin replied strongly: "It better not be."

"If people start actually dumping the dollar...I think it will destabilize markets, somewhat reminscient of last year."

He said markets should remain resilient if the dollar's drop occurs via a "'drip, drip, drip' trickle mode — rather than plunging sharply."

Art Cashin market insights have been on the money losing side for most of this rally but his experience on the New York Exchange floor is certainly very valuable and I always like to hear is word on the street.

I found this very interesting video with Market Wizard Linda Bradford Raschke. This 5 minute video is entitled, "Linda Raschke: Stick to the Plan and Become a Better Trader". She knows a thing or two about trading so you should probably listen.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Earnings Season Starts. Alcoa Jumps In After Hours.

Earnings season is kick starting tonight with Alcoa (AA). I played some S&P Futures intraday today but I decided to enter earnings season light on stock index positions, carrying only my line in Delta Petroleum (DPTR).

I was expecting a bounce in DPTR today after the Vice-President`s comments, but no such luck. Delta Petroleum shares keep stuck in a narrow trading range with nothing going on at all in the last few trading sessions.

Even though I am more and more convinced that Delta Petroleum shares will trade much higher at year end. Natural Gas futures keep marching higher adding value to Delta`s gas explorations. Its a waiting game. I am patient enough as you already know and I never feel much impatience when I know I am right. I am sitting on these shares for the next big move.

Alcoa (AA) shares were trading up more then 5 percent after the company was able to beat the street`s expectations. Let`s see how the market reacts tomorrow but it seems that a re-test of this move`s highs is in the cards. Alcoa (AA) can definetely move higher, that`s for sure.

I will leave you with a true masterpiece. Meet the new Ferrari 458 Italia.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Delta Petroleum (DPTR) Investor Relations Comments On Recent Events

The Vice President - Corporate Development and Investor Relations at Delta Petroleum (DPTR), Mr. Broc Richardson was kind to leave the following comment on our website. I think it would be interesting to share it with our readers. As you know I have been adding to my postion on Delta petroleum (DPTR) because I think that this recent surge in Natural Gas Prices will be reflected in Delta Petroleum`s earnings. Now I am buying even more:

While the Gray well's result was a disappointment, it was not entirely unexpected and therefore plans made to accommodate the well being uneconomic. Exploration drilling has significant risks, and it would be foolish for us to plan on getting revenue from an exploration well.

We budgeted the capital expenditure of the well, but didn't budget any revenue from the well given its risk. Therefore nothing has occurred that wasn't planned or budgeted in our forecast. We continue to remind shareholders that the true intrinsic value of Delta lies in our proved and probable reserves, primarily located in the Piceance Basin. And while the Gray well is a "dry hole", in our Piceance Basin properties we have drilled over 170 wells and have never drilled a "dry hole" there.

For 2008 we grew our proved reserves by 135% and demonstrated an industry-leading $1.35/Mcfe finding and development cost. This track record, regrettably, is lost on many shareholders that only focused on the Gray well. I believe the do themselves a disservice by only focusing on one well and not on the producing and cash flow generating assets of Delta.

Thanks for your interest and support of Delta Petroleum.


Regards,
Broc Richardson
Vice President - Corporate Development and Investor Relations

PS: I am short S&P Futures again at 1048. Market is overbought on the very short term and the dollar is rebounding today. I am expecting lower prices by the close of today`s session.

Have a good trading day.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

A Quote For Teddy. Good Trading Book.

I found this trading quote last night while reading a few pages of "Way Of The Turtle". I think Teddy will like this one:

"Edges are found in the places that are battlegrounds between buyers and sellers. Your task as a trader is to find those places and wait to see who wins and who loses"

You should read this book. Its has quality material and is fun reading. This is how Amazon introduces this trading book:

Way of the Turtle reveals, for the first time, the reasons for the success of the secretive trading system used by the group known as the “Turtles.” Top-earning Turtle Curtis Faith lays bare the entire experiment, explaining how it was possible for Dennis and Eckhardt to recruit 23 ordinary people from all walks of life and train them to be extraordinary traders in just two weeks.

Only nineteen years old at the time-the youngest Turtle by far-Faith traded the largest account, making more than $30 million in just over four years. He takes you behind the scenes of the Turtle selection process and behind closed doors where the Turtles learned the lucrative trading strategies that enabled them to earn an average return of over 80 percent per year and profits of more than $100 million."

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Gold Rises To Record. Heading For 9 Straight Annual Gain.

Gold Futures rose to a record price today on speculation that currencies will be devalued, spurring inflation and boosting the appeal of the precious metal for investors seeking to preserve their wealth. Gold futures climbed as high as 1,045 dollars an ounce in New York trading, topping the previous record of 1,033.90 recorded on March 2008. The spot price is headed for a ninth straight annual gain, the longest rally since at least 1948.

With all this fear and all this gold bullishness the gold market is probably near a short term top. I wouldn`t be surprised if we saw a correction towards the 800-900 area.

I was out of the S&P Futures market today, taking a breather. I closed my shorts at 1021 on Monday`s globex session but I still have all the reasons in the world to be bearish, but I am not sure that I have all the reasons to be short. Of course that to be bearish and not be short seems strange but markets are trading in a strange way. After the worse then expected non farm payrolls and some less convincing economic data points the markets recovered and raced higher yesterday and today. I am sitting on the sidelines for a while.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Australia Hikes Rates. Markets Will Be Volatile This Week.

I think this is today`s most important news item. The dollar is under pressure again, impacting risky assets. I think we will have a volatile week.

"Australia's central bank unexpectedly raised interest rates by a quarter point Tuesday, the first major economy to increase the cost of borrowing amid signs its recovery from the global slump is gaining momentum.

The Reserve Bank of Australia raised its cash rate to 3.25 percent from a 49-year low of 3 percent. Between September 2008 and April this year, the rate was slashed a total of four and a quarter percentage points as the financial crisis morphed into a global recession." in Associated Press

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Soros On The Economy

George Soros said today that the US economic recovery will be sluggish as “basically bankrupt” financial companies and indebted consumers impede it. “The U.S. will be very slow in recovery. The United States has a long way to go.”

Financial companies in the Americas have written down or lost $1.1 trillion since the financial crisis began two years ago, while the U.S. savings rate has risen to its highest level in 24 years as consumers retrench. Soros signaled a stronger rebound in Europe, “Europe has been less damaged,” Soros said today. The European Central Bank may be faster than the Federal Reserve to start withdrawing stimulus, he said, adding that it is “too early, certainly for the United States,” for policy makers to start reversing their emergency measures.

Regarding my own trading, it felt good to be out of the S&P Futures early on Globex at 1021 and watch prices surge on the sidelines. I did not sell short again as I am still taking a pulse on this market. Delta Petroleum did ok today, rising about 4%. But in a day where Natural gas prices surged, the stock market was up and Delta Petroleum was completely oversold, I expected a bit more from DPTR. I will give it the benefit of the doubt and I will see how it trades tomorrow.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Trading Is A Business. Treat It Like One.

As I was preparing a presentation and looking for some interesting material I came across "Trader Vic - Methods Of A Wall Street Master" and this paragraph got my attention:

"I base my business philosophy on three principles, listed here in terms of importance: preservation of capital, consistent profitability, and the persuit of superior returns. These principals are basic in the sense that they underlie and guide all my market decisions. Each principle carries a different weight in my speculative strategy, and they evolve from one to another. That is, preservation of capital leads to consistent profits, which makes pursuit of superior returns possible."

This was written in 1991 but I think its still a very valid proposition. I am also adding this line from the same book, "In my view, the way to build wealth is to preserve capital, make consistent profits, and wait patiently for the right opportunity to make extraordinary gains."

I am out of the S&P Futures and I will see how the market reacts to the ISM Services data to eventually place a trade. I think the probable outcome it to tick higher if the data is as expected or better and then to sell off and resume the short term downtrend that`s in place since the Fed meeting.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Greenspan Worried About The Jobs Number

Alan Greenspan keeps commenting the markets and the US economy:

"Former Federal Reserve Chairman Alan Greenspan predicts that the unemployment rate will push past 10 percent and stay at that level for a while. Pretty awful is how Greenspan describes Friday's report that the unemployment rate has risen to 9.8 percent." in CNBC.com

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Opportunities In Japan: The Yen And The Nikkei

Japanese Finance Minister Hirohisa Fujii said the government will intervene if the yen shifts in a “biased direction.”

“If currencies show some excessive moves in a biased direction, we will take action,” Fujii told reporters after meeting counterparts and central bankers from the Group of Seven in Istanbul today. He declined to comment on whether the yen is moving in such a way.

The yen rose to an 8 month high of 88.24 against the dollar this week after Fujii said he opposed currency intervention in principle, spurring speculation the government wouldn’t step into the foreign exchange market.

Several members of this community have been active on the USDJPY currency pair. I have also made a small commitment last week on this cross, long USDJPY with a trailing stop and I made a few pips. But this cross will present us with a good trading opportunity, and I suspect it will be on the long side but I am not sure if the time is now. The Yen has been rallying and is near its all time high versus the US Dollar.

But even more important is that the strong Yen will keep depressing the Nikkei. I am waiting for the correction in the japanese stock market to continue as I plan to buy it for the long haul, Jim Rogers style.

I will leave you with one of my favourite bands of all time. In this video, Bush perform "The Chemicals Between Us" a title that also reflects the good chemestry that evolved between the members of this trading community.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Still Short On The S&P Futures. Adding To Delta Petroleum (DPTR).

Crude oil futures prices ended lower Friday with Light, sweet crude oil for November delivery settling down 1.2%, or 87 cents, at 69.95 dollars a barrel, after trading two days above 70.

Early weakness inspired by strength in the dollar gained momentum after U.S. jobless data for September was gloomier than expected. The Labor Department said the unemployment rate rose to 9.8% from 9.7% in August, in line with analysts expectations. But nonfarm payrolls fell by 263,000 last month.


This economic data ignited fresh worries about the pace of economic recovery in the world's largest oil consumer, as weak oil demand is bulking up inventories and pressuring prices. Traders said crude prices may be poised to test the low end of the 65-75 dollars a barrel range, which has been in place since mid-July, or even break below it.

"We shouldn't be in the mid-$70s, but in the low $60s or high $50s," said Zachary Oxman, managing director of TrendMax Futures in Encinitas, Calif.

Phil Flynn, an analyst at PFGBest in Chicago, said oil prices are due for a downturn after ignoring ballooning inventories amid lower demand. "Eventually, massive oversupply will take its toll," he said. "We maintain our bearish outlook and look for the market to come down hard" by year end.

Regarding my own trading it was a very good week. I was short S&P Futures through out and profited from the sell off. I am still short expecting a 1,000 price test on the S&P Futures for next week. I took advantage of today`s early weakness on Delta Petroleum (DPTR) and added to my position in the 1.50`s. This is my play on the natural gas price recovery. I think that independent Oil & Gas companies like DPTR will have better then expected earnings, benefiting from the recent rise in Natural Gas prices. This is obviously a risky intermediate term play but I think it has a very good risk/reward from this point forward.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

Non Farm Payrolls Came Worse Then Expected. Things Are Looking Good For My Red Ship.

S&P Futures dropped further after the Labor Department said employers cut 263,000 jobs in September, more than the 175,000 median estimate of economists in a Bloomberg survey.

My short positions are shining and we will approach 1,000 in a nutshell. Oil is also selling off and may approach the 60 dollar mark over the next few weeks.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.

The Correction Is Upon Us. Good Trading Day.

In the worst day since July 2, the S&P 500 lost 2.6 percent to 1029.

My shorts finally paid off and I feel a bit vindicated. After all, I had been saying that the market was overextended and due for a pullback for a long time now. Markets sold off across the board and if tomorrow`s employment report disappoints we can test 1000 in the next few trading sessions.

I usually play the reversals on the S&P Futures initiating positions when the market is overbought or oversold and working the position from that point on. In this last push up the market was whispering to me to abandon at least temporarily this approach as the market kept pushing forward. But after all, markets are just markets and then go up, they trade sideways and they sell off. If we are consistent in our approach, sooner or later the market will tip its hand and then we really have to push forward and take advantage of the situation. That is what I did, I defended myself when things were going against and I am pressed and added to shorts when I felt that markets were getting weaker.

It seems that Greenspan had the key to unlock this market. Thanks, Alan. I will buy you a Belgian Beer next time I`ll visit Washington.

Art Cashin also had an interesting viewpoint on the market`s action, "What's happening is the economic data is turning weak again, and people are saying, 'here's the W'.

Hatzius, Goldman's chief U.S. economist, adjusted his forecast to an expected loss of 250,000 non-farm payrolls, from 200,000, and he maintained his forecast for unemployment at 9.8 percent from August's 9.7 percent. Tomorrow Employment Report is the big one and we must be alert and focused to get the best out of it.

Today, I will listen to the band that QualityStocks suggested us in the comments section. You can find The Cinematic Orchestra MySpace here.

Oil Trader`s Blog is a trading community for active online futures and stock traders. We provide our real time trading decisions and our market analysis on this website.