Hibernation Is Over And I am Hungry!

Still sitting tight on my Dax Futures shorts.

A picture is worth a thousand words.

"Stocks experienced a rare down day today as a series of fears swept over the markets. The day was a damaging one from a technical and fundamental perspective. Volume was again very heavy. This was the third huge volume distribution day in just the last two weeks. Breadth was negative at 3:1. While the overall recovery appears well intact, investors are increasingly fearful with regards to the near-term outlook. Concerns over European sovereign debt, bank regulation, the White House’s war on Wall Street, weak Chinese markets, record high bullish sentiment and a lack of positive near-term catalysts has some investors wondering if we haven’t come too far too fast." in The Prag Cap

Have a great weekend.

Related ETF`s: SPDR S&P 500 ETF (Public, NYSE:SPY), ProShares UltraShort S&P500 (ETF) (Public, NYSE:SDS)

Natural Gas Sells Off 8%. Delta Petroleum (DPTR) And SandRidge Energy (SD) Held Nicely.

Natural gas futures plunged more than 8 percent, driven lower by separate government reports indicating that producers aren't curtailing output, despite low prices.

Natural gas for June delivery on NYMEX settled 8.5 percent, lower at 3.98 dollars per million British thermal units after reaching a low of 3.967.

More interesting then the Natural Gas futures sell-off was the behaviour of some natural gas related stocks like Delta Petroleum Corp. (Public, NASDAQ:DPTR) and SandRidge Energy Inc. (Public, NYSE:SD).

Delta Petroleum (DPTR) lost only 0.6%, while SandRidge Energy also held nicely losing 1.2%. This is an interesting divergence that leads me to think that these stocks are firm and ready to move higher again.

Related ETf`s: United States Natural Gas Fund, LP (Public, NYSE:UNG)

If You Are Bearish On Oil, Contango Will Help Your Trading Position.

"We still anticipate an unusually difficult trading environment going forward, with prices gyrating within about the 80-88 dollars per barrel zone well into next month in response to daily stock market shifts, with the euro-zone situation providing some background influence"

Jim Ritterbusch, president of trading advisory firm Ritterbusch & Associates

Oil futures remains firmly in contango, the price structure that reflects near-term futures contracts trading at a discount to more distant contracts. The July contract's premium over crude due for delivery in June is just shy of 2000 dollars per contract.


Related ETF`s: Related ETF`s: United States Oil Fund LP (ETF) (Public, NYSE:USO), iPath S&P GSCI Crude Oil Total Return (Public, NYSE:OIL)

Chinese Stocks Lead Oil Prices By 4 Months

The Chinese stock market was the first index to turn around in late 2008 in the midst of the financial crisis — has slipped into a bear market. It is down 15 percent from the nearby high and 20 percent from last year’s interim peak. Why this is important is because the Shanghai index leads the CRB commodity spot price index by four months with a 72% correlation and over an 80% correlation with the oil price.

Jim Rogers: Oil Outlook

Jim Rogers gave his oil price outlook in an interview to IndexUniverse:

"I know that known reserves of oil are in decline. There’s not much question about that. There may be gigantic amounts of oil out there somewhere, but we don’t know where. But even if it’s there, if it’s in the middle of the Pacific Ocean, that’s not doing us much good because it will take decades and staggering amounts of money for it to come onstream. I know that known reserves of oil have peaked, yes. But whether total reserves of oil have peaked, I have no way of knowing—I’m not a geologist and I’m not smart enough.

The IEA, the International Energy Agency, did a survey a year or so ago and came to the conclusion that the world’s known oil reserves are declining at the rate of over 6 percent a year. Doing simple arithmetic will tell you that in 20 years, there won’t be any oil at any price. If that decline continues, then it’s infinity, there is no limit.

Normally what happens is prices go higher and higher, and that cuts demand for obvious reasons. It also eventually brings out new supply, whether that’s new types of energy or just more oil. So far that is not happening in a significant enough way. Yes, we have solar energy and wind energy and nuclear power coming, but none of them is coming at a very significant rate, and not enough to deal with the shortages that are developing."

This morning I dipped into portuguese equities. Portuguese banks, opened down almost 10%. I bought Banco BPI SA (Public, ELI:BPI), Banco Espirito Santo SA (Public, ELI:BES) and Banco Comercial Portugues SA (Public, ELI:BCP) at fire sale prices.

Have a great trading day.

Nice Sell Off. The Cartoon Is Back.

Portugal and Greece are sending shock waves through world equity markets.

I am short and sitting tight.

By the way, Art Cashin said yesterday that the bull run was nowhere near its end...Well, he has been wrong all the way, so maybe he has called the market top.

China: Another Sell Off. Is The Chinese Bear Market A Leading Indicator?

"The decline in Chinese equities is continuing this evening as investors become increasingly concerned about the property bubble and the government’s response to a potentially overheating economy. Stocks in Shanghai are down 2.3% this evening and are now off 11% year to date. Despite touting the growth of China as the harbinger and a pillar of the global recovery as the rally began in 2009 U.S. investors are now firmly ignoring any action outside of U.S. borders as investors become enveloped in a cloud of “better than expected” earnings and economic data. Meanwhile, the Eurozone continues to slowly unravel in sovereign debt fears and China’s equity markets remain deeply in negative territory for the year. As we’ve noted before, Chinese equities served as a leading indicator into and out of the recession. It will be interesting to see if U.S. investors are once again ignoring a glaring warning sign from abroad..."

in The Pragmatic Capitalist

I totally agree with the Prag Cap. Chinese stocks are trading at fresh 6 month lows. If China slows down substancially as Marc Faber and a few others predict, commodity prices including oil, will be severely affected.

Today we will have a rare and extraordinary TV moment: Goldman CEO and 'Fabulous Fab' Facing Congress (on CNBC)

Refiners: Better Conditions For Margin Improvement

Oil's near term discount and the prospects of higher prices ahead creates an ideal situation for refiners, who can get wider profit margins by buying oil cheaply and refining it into gasoline and other petroleum products. The positive conditions boosted activity in the oil markets as buyers interested in taking physical delivery of oil increased their trading activity.

"The commercial side of the market is getting involved. They haven't seen conditions as positive as these in nearly two years."

Tony Rosado, GA Global Markets broker

Related Stocks: Tesoro Corporation (Public, NYSE:TSO), Valero Energy Corporation (Public, NYSE:VLO), Sunoco, Inc. (Public, NYSE:SUN), Western Refining, Inc. (Public, NYSE:WNR) and Frontier Oil Corporation (Public, NYSE:FTO)

Boone Pickens And Natural Gas.

"In January 2010, our trade deficit for the month was $37.3 billion - $27.5 billion of that was money we sent overseas to import oil."

T. Boone Pickens, New York Times

Boone Pickens is lobbying for increased natural gas usage in Washington and he holds positions in several nat gas related stocks like Chesapeake Energy (CHK) and SandRidge Energy (SD) in its BP Capital portfolio.

Meredith Whitney: Goldman Sachs (GS) Is Worth 120

Interesting Article: Goldman's Lost 'Momentum,' Housing Woes Persist: Whitney

Related Stock: Goldman Sachs Group, Inc. (Public, NYSE:GS)

When I Am Wrong Only One Thing Convinces Me Of It, And That Is, To Lose Money

"If somebody had told me my method would not work I nevertheless would have tried it out to make sure for myself, for when I am wrong only one thing convinces me of it, and that is, to lose money. And I am only right when I make money. That is speculating."

Jesse Livermore

Quote: Market Wisdom

"If all I have is ten dollars and I risk it, I am much braver than when I risk a million if I have another million salted away."

Jesse Livermore

Contango At Multi-Month Highs

Crude Oil Futures contango is trading at multi-month highs:

"Oil storage costs are soaring to the highest level in four months as tanks in Oklahoma brim with near-record crude inventories. Oil for delivery in June cost 1.95 dollars a barrel less than the July contract as of April 21, the biggest gap since December 15 on the NYMEX. The premium for further-out delivery, or contango, mirrors the expense of stockpiling."

in Bloomberg.com

Related ETF`s: United States Oil Fund LP (ETF) (Public, NYSE:USO), iPath S&P GSCI Crude Oil Total Return (Public, NYSE:OIL)

Schork: Market Moving Data

"Tomorrow's consumer confidence number has the potential to move the market in a big way"

Stephen Schork of the Schork Report

OPEC Will Not Allow Oil Prices Above 100 USD per Barrel

"OPEC would pump more oil to prevent a rally in oil prices above 100 dollars per barrel from hurting the global economic recovery, Kuwait's oil minister said on Sunday."

in Reuters

Related ETF`s and stocks: iPath S&P GSCI Crude Oil Total Return (Public, NYSE:OIL), United States Oil Fund LP (ETF) (Public, NYSE:USO), Murphy Oil Corporation (Public, NYSE:MUR), Exxon Mobil Corporation (Public, NYSE:XOM), ConocoPhillips (Public, NYSE:COP), Transocean LTD (Public, NYSE:RIG)

Fresh Capital Going Into The Oil Space

June Nymex Oil Futures settled up 1.42 dollars at 85.12 dollars per barrel on Friday. The oil futures began to rally after U.S. data on new home sales and durable goods orders showed a picture of improvement in the U.S. economy.

New home sales unexpectedly rose by 27 percent last month, the largest monthly gain in nearly five years. Durable goods orders fell 1.3 percent, more than expected, but showed strong demand for capital equipment, which the market took as a positive sign. The improvement in the housing market and capital equipment spending fed into expectations for higher economic growth, which supports higher oil demand.

"The housing number really seemed to give this thing a kick," said Jim Ritterbusch, president of the trading advisory firm Ritterbusch and Associates. "Anytime you get a favorable economic release it ignites a fresh influx of capital into the oil space."

Related Stocks and ETF`s: United States Oil Fund LP (ETF) (Public, NYSE:USO), Murphy Oil Corporation (Public, NYSE:MUR), Exxon Mobil Corporation (Public, NYSE:XOM), ConocoPhillips (Public, NYSE:COP), iPath S&P GSCI Crude Oil Total Return (Public, NYSE:OIL)

Trading Systems. Playing With My Kid.

I have been busy in the last couple of days, making my trading business fully automated.

The superiority of my Oil Futures daytrading system vis-a-vis my discretionary trading is so huge that I will not bother myself with the ups and downs of the market anymore. During trading hours I will test and develop new trading models and not waste my time trading the market day in and day out. My system(s) will do that for me.

I have read an article over the weekend that stressed the importance of laugh. Traders who laugh a lot are better traders and there was even a much more important reference of how a good laughing therapy helped curing cancer. What about that?

So, here we go. Beginning today we will have a new feature on the blog. I will start posting some of my favourite jokes, so that we can all improve our trading performance while having a good time. Sounds fun, doesn`t it?

I am having a great weekend, enjoying time with my wife and kid. I love playing with Enzo. He is 9 months old now and it really seems to me that he has been around forever. Jim Rogers was right, its great to be a dad.

So here is the first joke: "All of these pilot and aviation jokes get me to thinking about my first skydiving instructor. During class he would always take the time to answer any of our stupid first-timer questions.

One guy asked, "If our chute doesn't open, and the reserve doesn't open, how long do we have until we hit the ground?"

Our jump master looked at him and in perfect deadpan and answered, "The rest of your life.""

Oil Trader`s Blog is a trading community for active traders.

A Bear That Looks Like a Bull.

I think this cartoon is very appropriate.

Have a great trading day.

Oil Trader`s Blog is a trading community for active traders.

This Recent Volatility Increase Is Bearish. Its Time For The Bear To Take The Stage.

Have you noticed this recent rise in intraday volatility prices? This is a bearish sign.

As I wrote yesterday evening, I have added to my shorts again. There is no way out, we will have a meaningful market correction.

I want to introduce you to a great band: Portugal. The Man.

My favourite track is "Dead Dog". This is how I am going to call this market during this downleg.

Now, its time for the bear to take the stage:


Oil Trader`s Blog is a trading community for active traders.

Credit Suisse: Retail Investors Are Starting To Buy Equities

"Since March 2009, retail investors have sold 82 billion USD of equity and bought 93 billion of bonds, and have just started to buy."

Source: Credit Suisse

Oil Trader`s Blog is a trading community for active traders.

Is Mean Reversion Trading Over?

** Trading results of a simple strategy to measure the existence/absence of mean reversion on the S&P 500 Index; The trading rule is, if the index goes up in any given day, we go long for the next trading session, if the index ends the session in negative territory, we short it for the next session (always using daily closes and no transactions costs were considered)

As you know I have started trading professionally in 2000, 10 years ago. And all the research I gathered over the years to support both my discretionary and my systematic trading showed the superiority of mean reversion trading, or fading the moves day in and day out. The premise is simple, most market moves are simply noise and we should always take the other side of the market.

Over the last 10 years (this graph is not shown in this post) if you had sold short the SPDR S&P 500 ETF (Public, NYSE:SPY) or the S&P Futures after an up day and bought every time it went down in a single session you would have tripled your money without using any leverage. That was the power of mean reversion in the S&P 500 Index and in the stock market in general.

I have the habit to run studies for periods of 10 years, thinking that what has happened prior to that is ancient history. But this time I went further back... I researched mean reversion back to the 60`s, roughly 50 years of historical data.

Why did I run this test? Because I have found myself to be on the wrong side of the market quite often lately and I COULD NOT UNDERSTAND WHY. I always had great trading results over the years (around 80% winning months), using my pleuthora of trading techniques and all of a sudden the well seemed to have dried (there were a few good leveraged plays that went my way, but I really had to push hard to make some real money).

Of course I am refering to discretionary trading results because my Oil System has been providing my bread and butter for the past 3 or 4 months. But the Oil System is an intraday system and does not suffer from the absence of mean reversion. And why did I have the need to build it? Because my trading was subpar. And why was it subpar? Because the basic concept I have been trading is not working.

Now, what are the conclusions? I have listed some below and I hope you will give me your feedback on the forum. But what I take from this data is:

- Mean reversion started working ONLY in 2000 (it has not ALWAYS worked, not by any means)
- Prior to the year 2000, it payed to go with the flow; if the market rose it would probably rise again in the next day and the reverse was also true
- 2008 was the best year for mean reversion
- late 2009 (you cannot see it on the graph, but the last few months were terrible for mena reversion trading) and 2010 mean reversing stopped working.

Is this a permanent market change in market dynamics? Is this just a seasonal anomaly?

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Playing Goldman Sachs (GS) On The Long Side For A Daytrade.

As I said in the commenting section I was waiting for the line of least resistance to define itself on Goldman Sachs (GS) to play it intraday. I was able to buy just before the afternoon breakout and I am still holding it.

It isn`t a big position so I will not make any REAL money out of it. But I am loving this trade because I saw it coming long before the setup and I was able to fire on the long side...and on the right time.

This was a JL classic.

Oil Trader`s Blog is a trading community for active traders.

Shanghai Composite Tumbles 5%. The Market Correction Is In Motion.

"China’s Shanghai Composite Index plunged 4.9 percent after the government told banks to stop loans for third-home purchases." in Bloomberg

That is quite a drop for the chinese stock market. Other asian indexes also fell but losses were rather contained.

I have done some testing and some research over the weekend and I found some very interesting change in market dynamics from the last 10 years to the last 6 to 9 months. I think that is the reason that I haven`t been reading the market as well as I used to in the past. The change I am refering to, is the absence of mean reverting in the prices movements of the S&P 5oo Index. The Market Sci Blog also pointed out this "anomaly" or "permanent market change" recently:

"Despite the breakdown in short-term mean-reversion over the last eight months, in the grand scheme of things short-term MR is still the play du jour (as of the late 1990’s) and I continue to work off the thesis that short-term MR will firm up once we get to the other side of this bullish run up." in Market Sci Blog

I do not agree with this blogger and I am leaning towards the permanent change in market conditions and that will imply a change in my market tactics. Less countertrend moves, more go with the market flow trades. I will be discussing the conclusions of my research over the course of this week.

For the time being I am keeping my Dax Futures shorts and trading my intraday oil futures system. I am looking forward to close all shorts on further weakness and reassess all my trading strategies for a couple of days, hopefully at a new equity high for the year.

Have a great trading day.

Related ETF`s: iShares FTSE/Xinhua China 25 Index (ETF) (Public, NYSE:FXI), PowerShares Gld Drg Haltr USX China(ETF) (Public, NYSE:PGJ) and United States Oil Fund LP (ETF) (Public, NYSE:USO)

Oil Trader`s Blog is a trading community for active traders.

I Won Using My Brains, Helped By Luck.

It was a fantastic trading day. I closed the S&P Futures short positions and the VXX and I am keeping my Dax Futures shorts.

I had one of the best days of my trading carreer, going insanely leveraged and short into Friday`s session. I won using my brains, helped by luck. The Goldman Sachs story came at exactly the right time.

But as I told you a few days ago, I seldom lose when I am sure I am right.

Here is how this trade begun, late Wednesday,

"The shorts were hurting me once again and my body and head were "telling" me to close everything and focus exclusively on my oil system.

What did I do? I have tripled my shorts on the closing bell, completely reversing my fragile impulses. I probably will not sleep in the next few days but my baby cries all night, anyway...

There have been something like 50 sessions without a 1% pullback...I think that is a record, or at least a multi decade record.

Today can very well be the top of the S&P 500 this year. I am sounding like Marc Faber that has called 5 or 6 tops in the stock market just this year, but this time its probably for real. Its like The Boy Who Cried Wolf...

I know I am making the right move, and when I am sure of a trade I seldom lose."

Touché!

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I Sense That Tomorrow Will Be A Great Trading Day. Google (GOOG) Is Selling Off In After Hours Trading.

Its amazing how you feel every tick of the market when you are fully loaded. I was tense all day, expecting a sell-off and fearing another rally. In the end, after the initial and promising break and the subsequent threat of another rally we had an unch close on the S&P 500 Index.

But Google (GOOG) is selling off in after hours trading after disappointing earnings. Maybe tomorrow will be my best day of the year. We`ve had 50 plus sessions without a 1 percent downmove, even if you add up consecutive down days. Will it happen tomorrow? I bet it will.

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In A Kamikaze Move, I Have Tripled My Shorts. So Help Me God.

The shorts were hurting me once again and my body and head were "telling" me to close everything and focus exclusively on my oil system.

What did I do? I have tripled my shorts on the closing bell, completely reversing my fragile impulses. I probably will not sleep in the next few days but my baby cries all night, anyway...

There have been something like 50 sessions without a 1% pullback...I think that is a record, or at least a multi decade record.

Today can very well be the top of the S&P 500 this year. I am sounding like Marc Faber that has called 5 or 6 tops in the stock market just this year, but this time its probably for real. Its like The Boy Who Cried Wolf...

I know I am making the right move, and when I am sure of a trade I seldom lose.

Oil Trader`s Blog is a trading community for active traders.

Everything Looks Rosy. I Am Buying The VXX, iPath S&P 500 VIX Short Term ETN

I am buying the iPath S&P 500 VIX Short Term ETN (VXX) for a short term play. The VXX is hitting another 52 week low and trading in the 19`s. This is literally another short position as the VXX moves inversely to the stock market.

I am getting hit again on my shorts and if I was using the leverage I used to in 2008 and 2009 my account would have been decimated in this rally. This is the most persistent rally I have ever seen in equities and I am very happy with my decision to move the substancial part of my trading funds (remember that I trade about a third of my net worth excluding real estate) to my oil system.

Besides my Dax Futures short, I am still carrying underwater shorts in several stocks like KB Home (KBH), Nvidea (NVDA), Apple (AAPL), Darden Restaurants (DRI), Microsoft (MSFT) and Pulte Homes (PHM). They are all in the red...for now.

I am probably the last bear standing and I am looking forward to close shorts on the first meaningful correction. This specie cannot survive such a tempestuous climate.

But things change quickly in the markets and we can have a different market climate in the near future. Maybe there will be a change to ride the market down from an extreme overbought condition. And I think that if I am both wise and lucky, I may very well make a killing on the next downleg...

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Peak Oil Revisited.

I found this very interesting article on Peak Oil:

Despite gas prices having climbed a good chunk of the way back up to 2008 levels, the level of worry about higher prices hasn't seemed as high this time around. To test that, I pulled data from Google Trends on searches for "peak oil" and compared that to WTI crude prices over the same period. As this graph shows, while the two moved up together in 2007/2008, this time around "peak oil" and higher prices have disconnected in the public awareness -- at least for now.

Why might that be? One explanation is that oil prices haven't climbed as fast as they did in early 2008, with the slope of the ascent being a primary source of worries. Second, with consumers having seen prices considerably higher than today's just two years ago, perhaps they have become desensitized to oil at "merely" $87 a barrel. Of course, if either or both are true it wouldn't take much to turn around perception and have people paranoid about peak oil again: higher prices or a faster ascent would do the deed in short order. in paul.kedrosky.com

Related ETF`s: United States Oil Fund LP (ETF) (Public, NYSE:USO), iPath S&P GSCI Crude Oil Total Return (Public, NYSE:OIL) and ProShares UltraShort DJ-UBS Crude Oi ETF (Public, NYSE:SCO)

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Boone Pickens: Oil Will Rally Further

Boone Pickens sees room for oil prices to rally another 10 percent, as supply isn’t keeping up with demand. Pickens also predicts President Barack Obama's offshore drilling plan will have little impact on prices and output.

"All the world can produce is 85 million barrels a day, projections are now that you’ll need 86 to 86.5 million barrels a day, this is going to move up."

Related ETF`s: United States Oil Fund LP (ETF) (Public, NYSE:USO) and iPath S&P GSCI Crude Oil Total Return (Public, NYSE:OIL)

I found this interesting piece on Business Week: Fifty Ugliest Cars of the Past 50 Years

They have listed a Ferrari on the Fifty Ugliest Cars of the Past 50 Years. What were they thinking about? They know nothing about cars.

After Hours: Intel Beats The Street

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Morgan Stanley`s Paradox Of Strength

“Clearly the markets are in a utopia-type environment; with the Fed seemingly on perma-hold and upside in growth… We are on the other side of those views. As we see it, strong growth will ultimately be met with withdrawal of liquidity, and the risk markets will not like that medicine.” Morgan Stanley

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Global Oil Demand Will Hit A Record This Year

Global oil demand will hit a record high this year, the International Energy Agency (IEA) said on Tuesday, revising up consumption estimates as the world economy recovers from recession. The Paris-based adviser to industrialized economies raised its forecast for world oil demand growth this year to 1.67 million barrels per day (bpd), up 100,000 bpd.

The agency said in its monthly Oil Market Report that world oil demand would reach an average of 86.60 million bpd this year, up from 84.93 million in 2009. The previous record high for world oil demand was 86.5 million bpd in 2007 before the onset of the global financial crisis and economic slowdown.

"There are signs of oil demand picking up in North America and the Pacific, Asia and the Middle East although consumption in Europe still looks weak," said David Fyfe, head of the IEA's Oil Industry and Markets Division.

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Oil Futures Down For The Fourth Consecutive Session.

Crude for May delivery, the most active contract, lost 58 cents, or 0.7%, to 84.34 dollars a barrel on NYMEx. The contract hit an intraday high of 85.71 dollars a barrel. Monday marked the fourth consecutive session that crude-oil futures ended lower. On April 5, oil for May delivery added $1.75, or 2%, to end at 86.62 dollars a barrel, the highest price since October 2008.

Related ETF: United States Oil Fund LP (ETF) (Public, NYSE:USO)

Must Read Trading War Story: LINK

I have to say that I am missing those extraordinary volatile days of the last few years. I was made for quick action. These markets are non-tradable for my trading style. That is why I am hidding in my oil system for a while. But the time will come to grab my sword again.

Are you following SandRidge Energy (SD) price action? Its getting interesting again for a long play.

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Bernanke`s Reflation Bubble

"Stocks have now rallied over 40 sessions without a 1% loss. In addition, the SPDR S&P 500 ETF (Public, NYSE:SPY) has rallied in 32 of the last 44 sessions while banks, Financial Select Sector SPDR (ETF) (Public, NYSE:XLF), have rallied in 36 of the last 44 sessions. Bernanke’s reflation trade is beginning to get a very bubbly feel to it."

in The Prag Cap

I think there is a good probability of a big reversal today. Stay tuned.

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Earnings Season Kicks Off This Week.

This week marks the beginning the earnings season and is also a week filled with important economic data points. Alcoa (AA) will kick-start the earnings season tomorrow after the bell.

A good summary of what can move the markets this week can be found here.

Oil Trader`s Blog is a trading community for active traders.

Baltic Dry Index Signals A Slowdown In Economic Activity

Notice the divergence between the Baltic Dry Index and the uppa-uppa S&P 500 Index.

Related ETF`s: SPDR S&P 500 ETF (Public, NYSE:SPY) and ProShares UltraShort S&P500 (ETF) (Public, NYSE:SDS)


By the way this is my favourite music of all time. I play it almost every day when I get home, specially when I have a great trading day. And if its a Bad Day...I play it louder.

Oil Trader`s Blog is a trading community for active traders.

Bears Taking The Stage.

Please don`t pollute the forum section. It is meant to share useful information and trading tactics among traders.

It seems that I will finally have the opportunity to close my structural shorts on the DAX Futures and on the S&P futures and move to a more flexible trading strategy.

Have a great trading day.

Oil Trader`s Blog is a trading community for active traders.

Byron Wien: Oil Is Going Up

“The emerging markets are consuming more and more oil all the time. The developing world consumes a little over 20 million barrels a day and they’re going to add one million barrels a day every year for the next 20 years. I don’t know where it’s all going to come from—the price is going up.”

Byron Wien, CNBC
April 7th

Related ETF`s: United States Oil Fund LP (ETF) (Public, NYSE:USO) and iPath S&P GSCI Crude Oil Total Return (Public, NYSE:OIL)

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Are We Ready To Rollover?

"It has now been 42 days since the S&P 500 has had a pullback (one-day or multi-day) of 1%. Since 1990, there have been 10 other periods where the index went 40 days or more without a 1% pullback. The table below highlights these occurrences.

The S&P 500 is up 8.75% over the last 42 days. As shown, the number of days without the 1% pullback ranges from 40 to 70, and the price gain ranges from 4% to 9%. So while there have been longer periods of time without a 1% pullback, the current gain of 8.75% without a 1% decline is at the top end of the range over the last 20 years."

in BIG

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Further Digging Into 1Q Trades. Cartoons.

As I digged further into my first quarter trades, another category of trades emerged as winners. The daytrading category in all assets, stocks, futures and forex were good contributors to the overall P&L.

So, where was the problem? Which trades did more harm than good?

The answer is obvious. The overnight shorts on the S&P Futures and on Dax Futures. Those were the mistakes. So the solution won`t be so drastic as I yesterday thought. No more overnight trades, but the daytrade is back on.

I have finished the analysis of the trades and I focusing now on making a great month and quarter.

The book I recommended yesterday also has some practical tips like, "Read something funny before you go to sleep each night. Get a collection of cartoon books or joke books and have them by your bedside."

My favourite cartoon is Calvin And Hobbes. What is yours?

Have a great trading day.

Oil Trader`s Blog is a trading community for active traders.

Recommended Book: Super Trader

We have been discussing Van Tharp`s material on the forum and I would like to recommend his latest book, Super Trader.

I will share with you over the next few days some of my favourite parts of that book and I will start with this passage:

"A peak performance trader is totally committed to being the best and doing whatever it takes to be the best. He feels totally responsible for whatever happens and thus can learn from mistakes. These people typically have a working business plan for trading because they treat trading as a business"

I find Tharp`s material very useful for my trading business.

Oil Trader`s Blog is a trading community for active traders.

5 Winning Trades. Happy With My Trading Resolution.

"I've been told a few times in my career that I was right, but for the wrong reasons - usually by someone who was wrong for the right reasons." - John Murphy

I had a very good trading session on my Oil Futures system. I won on five consecutive trades and I am happy with my trading resolution. I am only trading my oil futures system and leaving the discretionary part of my business. I am keeping the profitable part of my trading and I will use the spare time to research the markets.

It seems that I cannot beat my systems. I am happy that my creation is trading better than me. The best part is that I always go home "in cash".

I am focusing exclusively on my system because it is simple too good. I cannot beat it.

Oil Trader`s Blog is a trading community for active traders.

All The Money I Have Made This Year Has Came From Systematic Trading.

As I was debriefing my first quarter trades I noticed that all the money I have accumulated has came from my oil trading system. That means that my discretionary trades have cost me some money despite having some great trades, like the Delta Petroleum (DPTR) surge a few weeks ago. But being short in a runaway bull market is costly and I have paid the price.

I will probably only trade my oil system for the foreseeable future. Its more profitable and requires less work. So there is no doubt in my mind that it`s the right move for me.

As Rene Descartes so wisely puts it, "It is not enough to have a good mind. The main thing is to use it well."

Oil Trader`s Blog is a trading community for active traders.

Short Pick: Radian Group (RDN)

My most recent short technical pick is Radian Group (RDN):

I closed my short position on Titanium Metals (TIE) for a 3% profit and I am moving that money to Radian because it is even more stretched. Titanium Metals is still on my radars and if it becomes extremely overbought again I will play it again on the short side. Chesapeake Energy (CHK) bounced back nicely in the last couple of days and I sold it. I only have shorts now.

Have a great trading day.

Oil Trader`s Blog is a trading community for active traders.