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CRUDEOILM1! trade ideas

Crude passes first test of supportCrude oil flew higher yesterday, after spending the morning testing significant support. Front-month WTI dropped below $80 per barrel on Tuesday, setting the market up for a face-off between the bulls and bears. It proved to be quite a tussle, with the winner likely to set the tone and near-term direction. In the end, the bulls managed to spark a significant rally once prices broke back above $80. Upside momentum continued to build, and then news of a larger-than-expected US inventory drawdown bolstered the push higher. Prices pulled back a touch this morning, but overall the move looks constructive. This positive reaction to a serious test of support has increased the probability of more gains to come. But traders should be on their toes should prices turn down again, as there’s no guarantee that there won’t be another retest of $80. While the economic outlook for China remains uncertain, the US economy continues to motor along, even if in a lower gear from earlier in the year. But the prospect of three 25 basis point rate cuts from the Federal Reserve before year-end is also helping to boost positive sentiment.
NYMEX:CL1!
by TradeNation
Exploring Bearish Plays w/ Futures, Micros & Options on FutureIntroduction The WTI Crude Oil futures market provides various avenues for traders to profit from bullish and bearish market conditions. This article delves into several bearish strategies using standard WTI Crude Oil futures, Micro WTI Crude Oil futures contracts, and options on these futures. Whether you are looking to trade outright futures contracts, construct complex spreads, or utilize options strategies, this publication aims to assist you in formulating effective bearish plays while managing risk efficiently. Choosing the Right Contract Size When considering a bearish play on WTI Crude Oil futures, the first decision involves selecting the appropriate contract size. The standard WTI Crude Oil futures and Micro WTI Crude Oil futures contracts offer different levels of exposure and risk. WTI Crude Oil Futures: Standardized contracts linked to WTI Crude Oil with a point value = $1,000 per point. Suitable for traders seeking significant exposure to market movements. Greater potential for profits but also higher risk due to larger contract size. TradingView ticker symbol is CL1! Margin Requirements: As of the current date, the margin requirement for WTI Crude Oil futures is approximately $6,000 per contract. Margin requirements are subject to change and may vary based on the broker and market conditions. Micro WTI Crude Oil Futures: Contracts representing one-tenth the value of the standard WTI Crude Oil futures. Each point move in the Micro WTI Crude Oil futures equals $100. Ideal for traders who prefer lower exposure and risk. Allows for more precise risk management and position sizing. TradingView ticker symbol is MCL1! Margin Requirements: As of the current date, the margin requirement for Micro WTI Crude Oil futures is approximately $600 per contract. Margin requirements are subject to change and may vary based on the broker and market conditions. Choosing between standard WTI Crude Oil and Micro WTI Crude Oil futures depends on your risk tolerance, account size, and trading strategy. Smaller contracts like the Micro WTI Crude Oil futures offer flexibility, particularly for newer traders or those with smaller accounts. Bearish Futures Strategies Outright Futures Contracts: Selling WTI Crude Oil futures outright is a straightforward way to express a bearish view on the market. This strategy involves selling a futures contract in anticipation of a decline in oil prices. Benefits: Direct exposure to market movements. Simple execution and understanding. Ability to leverage positions due to margin requirements. Risks: Potential for significant losses if the market moves against your position. Mark-to-market losses can trigger margin calls. Example Trade: Sell one WTI Crude Oil futures contract at 81.00. Target price: 76.00. Stop-loss price: 82.50. This trade aims to profit from a 5.00-point decline in oil prices, with a risk of a 1.50-point rise. Futures Spreads: 1. Calendar Spreads: A calendar spread, also known as a time spread, involves selling (or buying) a longer-term futures contract and buying (or selling) a shorter-term futures contract with the same underlying asset. This strategy profits from the difference in price movements between the two contracts. Benefits: Reduced risk compared to outright futures positions. Potential to profit from changes in the futures curve. Risks: Limited profit potential compared to outright positions. Changes in contango or backwardation could hurt the position. Example Trade: Sell an October WTI Crude Oil futures contract. Buy a September WTI Crude Oil futures contract. Target spread: Decrease in the difference between the two contract prices. In this example, the trader expects the October contract to lose more value relative to the September contract over time. The profit is made if the spread between the December and September contracts widens. 2. Butterfly Spreads: A butterfly spread involves a combination of long and short futures positions at different expiration dates. This strategy profits from minimal price movement around a central expiration date. It is constructed by selling (or buying) a futures contract, buying (or selling) two futures contracts at a nearer expiration date, and selling (or buying) another futures contract at an even nearer expiration date. Benefits: Reduced risk compared to outright futures positions. Profits from stable prices around the middle expiration date. Risks: Limited profit potential compared to other spread strategies or outright positions. Changes in contango or backwardation could hurt the position. Example Trade: Sell one November WTI Crude Oil futures contract. Buy two October WTI Crude Oil futures contracts. Sell one September WTI Crude Oil futures contract. In this example, the trader expects WTI Crude Oil prices to remain relatively stable. Bearish Options Strategies 1. Long Puts: Buying put options on WTI Crude Oil futures is a classic bearish strategy. It allows traders to benefit from downward price movements while limiting potential losses to the premium paid for the options. Benefits: Limited risk to the premium paid. Potential for significant profit if the underlying futures contract price falls. Leverage, allowing control of a large position with a relatively small investment. Risks: Potential loss of the entire premium if the market does not move as expected. Time decay, where the value of the option decreases as the expiration date approaches. Example Trade: Buy one put option on WTI Crude Oil futures with a strike price of 81.00, expiring in 30 days. Target price: 76.00. Stop-loss: Premium paid (e.g., 2.75 points x $1,000 per contract). If the WTI Crude Oil futures price drops below 81.00, the put option gains value, and the trader can sell it for a profit. If the price stays above 78.25, the trader loses only the premium paid. 2. Synthetic Short: Creating a synthetic short involves buying a put option and selling a call option at the same strike price and expiration. This strategy mimics holding a short position in the underlying futures contract. Benefits: Similar profit potential to shorting the futures contract. Flexibility in managing risk and adjusting positions. Risks: Potential for unlimited losses if the market moves significantly against the position. Requires margin to sell the call option. Example Trade: Buy one put option on WTI Crude Oil futures at 81.00, expiring in 30 days. Sell one call option on WTI Crude Oil futures at 81.00, expiring in 30 days. Target price: 76.00. The profit and loss (PnL) profile of the synthetic short position would be the same as holding a short position in the underlying futures contract. If the price falls, the position gains value dollar-for-dollar with the underlying futures contract. If the price rises, the position loses value in the same manner. 3. Bearish Options Spreads: Options offer versatility and adaptability, allowing traders to design various bearish spread strategies. These strategies can be customized to specific market conditions, risk tolerances, and trading goals. Popular bearish options spreads include: Vertical Put Spreads Bear Put Spreads Put Debit Spreads Ratio Put Spreads Diagonal Put Spreads Calendar Put Spreads Bearish Butterfly Spreads Bearish Condor Spreads Etc. Example Trade: Bear Put Spread: Buying the 81.00 put and selling the 75.00 put with 30 days to expiration. Risk Profile Graph: This example shows a bear put spread aiming to profit from a decline in WTI Crude Oil prices while limiting potential losses. For detailed explanations and examples of these and other bearish options spread strategies, please refer to our published ideas under the "Options Blueprint Series." These resources provide in-depth analysis and step-by-step guidance. Trading Plan A well-defined trading plan is crucial for successfully executing any strategy. Here’s a step-by-step guide to formulating your plan: 1. Select the Strategy: Choose between outright futures contracts, calendar or butterfly spreads, or options strategies based on your market outlook and risk tolerance. 2. Determine Entry and Exit Points: Entry price: Define the price level at which you will enter the trade (e.g., breakout, UFO resistance, indicators convergence/divergence, etc.). Target price: Set a realistic target based on technical analysis or market projections. Stop-loss price: Establish a stop-loss level to manage risk and limit potential losses. 3. Position Sizing: Calculate the appropriate position size based on your account size and risk tolerance. Ensure that the position aligns with your overall portfolio strategy. 4. Risk Management: Implement risk management techniques such as using stop-loss orders, hedging, and diversifying positions to protect your capital. Risk management is vital in trading to protect your capital and ensure long-term success. Conclusion In this article, we've explored various bearish strategies using WTI Crude Oil futures, Micro WTI Crude Oil futures, and options on futures. From outright futures contracts to sophisticated spreads and options strategies, traders have multiple tools to capitalize on bearish market conditions while managing their risk effectively. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
NYMEX:CL1!Education
by traddictiv
Oil's Descent: Triangles, Elliott, Reversion, & BackwardationIn this analysis, we will delve into the oil market’s current state and explain why a significant reversal is imminent. Contracting Triangle Oil has been forming a contracting triangle since the beginning of May. The lead-up to the triangle was bearish, so statistically, the breakout should also be bearish. The upper extreme of the triangle is at $84.45, but prices could advance up to $87.67 before invalidating the bearish breakout. Wave C of E of X According to Elliott Wave analysis, contracting triangles form five waves (i.e., A, B, C, D, E). Typically, each of those five waves subdivides into a zigzag (i.e., A, B, C). We can clearly count five waves of the triangle and three waves of the final zigzag, indicating that the reversal should occur at any moment. Mean Reversion On the daily timeframe, oil has approached the overbought level on three different mean reversion indicators. It has been overbought since June 17, according to the Stochastic Oscillator, and it will be overbought according to RSI and Bollinger Bands at $85.09. Backwardation Backwardation, where forward contracts are traded below the expected spot value at maturity, often signifies a bullish outlook for crude oil. However, it can also indicate short-term market stress caused by buyers' panic over excess demand or insufficient supply. This scenario often results from an overreaction, and as future supply and demand expectations come into balance, the oil market tends to experience a selloff towards more rational pricing. Given the current strong state of backwardation in oil futures, this dynamic could unfold, contributing to the next market downturn. Executing the Bearish Strategy As this is a countertrend trade, risk should be tight, and one’s stop loss should be adhered to religiously. While unlikely, if prices were to continue their ascent, and you have a wide or flexible stop loss, you could experience a substantial loss. I believe the best place for a stop loss would be just beyond the end of intermediate wave C at $87.68. If prices move beyond this level, it would invalidate the Elliott analysis and offer a strong indication of a bullish breakout from the triangle. As long as prices hold below this level, the outlook would remain bearish, unless a strong consolidation pattern forms near these highs. If the analysis is correct and we do see a bearish breakout, prices could easily decline to $65, possibly lower. This would be a reasonably conservative target, but I am planning a discretionary exit as price action develops. As for entry, this is a personal decision. I see three possible options: Wait for prices to climb a little higher (less risk at entry if successful, with a chance of entering lower with more risk if unsuccessful). Wait for prices to decline a bit to confirm the analysis (higher probability of a winning trade, with greater initial risk at entry). Enter now (somewhere in between options 1 and 2). Good luck, everyone!
NYMEX:CL1!Short
by epistemophiliac
Can $80 Hold?Crude Oil (August) Yesterday’s close: Settled at 81.91, down 0.30 WTI Crude Oil futures struggled to hold footing Monday after Chinese GDP came in at 4.7% y/y Sunday night, lower than the 5.1% forecast and the lowest since Q1 2023. Although Industrial Production for June did beat at 5.3% versus 4.9%, it slowed from the prior month’s while Retail Sales also missed and Fixed Asset Investment hit a four-month low. The slate of poor economic data played into the “slowing China” narrative and left a difficult path for Crude Oil which has hit the lowest since June 26th this morning. U.S. Retail Sales data came in better than expected this morning, reinforcing the idea of a strong domestic economy and one that can support prices at the pump. Later today, U.S. weekly inventory data comes into the picture with the private API survey ahead of tomorrow’s official EIA release. Amid such, price action is testing a critical area of rare major four-star support at 79.90-80.18 and one the bulls must defend. Bias: Neutral Resistance: 81.47-81.70***, 82.21-82.39*** Pivot: 80.97-81.25 Support: 79.90-80.18****, 78.80-78.94**, 78.05-78.48***, 77.05-77.58*** Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers: CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
NYMEX:CLQ2024
by Blue_Line_Futures
CLQ2024 LongLight Crude Oil Futures are showing signs of a potential bullish reversal. The price has bounced off a support level around $81.80 and is forming a higher low. The trend indicators show a mixed picture with shorter-term (50 and 100 bars) trending up, while longer-term (150 and 200 bars) are still down. This suggests a possible trend change. The entry is placed at the current price, with the stop loss below the recent low. The profit target is set at the next significant resistance level (trend line). The risk-reward ratio is favorable at 1:2. However, the score is 6/10 due to the conflicting longer-term downtrend and the proximity to overhead resistance. Traders should be cautious of potential resistance at the descending trend line around $83.74. { "direction":"Long", "symbol":"CLQ2024", "interval":"1h", "entry":82.44, "stop":81.80, "profit":83.74, "risk":640, "reward":1300, "quantity":1, "score":6 }
NYMEX:CL1!Long
by ivvix
#202429 - priceactiontds - weekly update - wti crude oilGood Evening and I hope you are well. Quote from last week: comment: Bulls got the breakout again, retested it and held above 82.74. I do think the high is here in the price area below 86 but market will probably have to spend more time here before bears can potentially trade it back down. In April we spent 14 days at the highs until market broke below, retested and went down for good. I expect the same pattern. comment: Outlooks and chart drawings do not get better than the oil chart posted below. Changed nothing for 2 weeks and still holds up. Next week could be the breakout for the bears. Decent enough rejections above 83 and even if bulls touch 84 again, I think we will trade down over the next weeks/months. current market cycle: trading range inside the big triangle. Market should stay below 86 or this take is probably wrong. On smaller tf we are still inside the bull channel. key levels: 80-86 bull case: Bulls were rejected a third time above 83.5 and even though they are in control above the daily 20ema, the selling pressure gets bigger and at some point they want a deeper pullback to buy. Invalidation is below 81. bear case: Bears have all the arguments imo. Market at big resistance 84 after bulls having 3 clear legs up. Bears now want a deep pullback to 80 and then keep the bounce below 83 and form a proper channel down. Invalidation is above 85. outlook last week: “short term: Bearish but I wait for bull channel break and bigger selling pressure. Can come fast or take the whole week. All bullish targets are met and as I wrote last week, next 10 points will probably be made to the down side.” → Last Sunday we traded 83.16 and now we are at 82.21. High was 83.74 and low was 80.81. outlook was good for 200+ points. short term: Bearish. All shorts have stop 86.35 so trade small. medium-long term: We are seeing the big triangle playing out between 72 and 82/84. The high of the triangle got tested until mid of April and we have now tested the lows around 72.5. We are at the bear trend line and odds favor the bears if they stay below 86.27 for trading back down below 76 again. current swing trade: Short since 82.58. Would add to shorts above 83.5 if we get there. SL 86.35. chart update: Nope.
NYMEX:MCL1!Short
by priceactiontds
GET READY FOR MORE INFLATION BOYS- CRUDE OIL WILL GO TO U$ 200Hello Traders, I have to warn everybody what I have discovered because it will be bad if this happens. From what I have found on the charts #CRUDEOIL #CL1! #OIL will go to U$ 200 until OCT 2025. Interestingly, the same happened in AUG 2007, Stock Market Crash During the Great Recession. On Oct. 9, 2007, the Dow Jones Industrial Average closed at its pre-recession high of 14,164.53. By March 5, 2009, the index had fallen more than 50% to 6,594.44. Will this lead to another Stock Market Crash and a Recession in 2025 - 2027? This I do not know, all I can say is that same chart pattern is confirmed. I have predicted the last BTC CRASH 2017, because I found the same pattern in the past. Well, I hope I can help some people sharing this. So, if you can get ready and prepare for it. HOPE FOR THE BEST- PREPARE FOR THE WORST. Good Luck and Good Profit
NYMEX:CL1!Long
by UnknownUnicorn5368510
$CL Bull Trap?If history has taught me anything it is this... "They'll make the chart look as bullish as possible before the rug" And when I look at this chart, my immediate reaction is bullish. But upon closer inspection I see some warning signs. 1.) $85.9 seems to be incredibly important. More importantly, we are below, and failing yet another retest of it. 2.) I have this idea of "springboards," its the idea that below support and above resistance there is a number offering support/resistance in each retest. In this case $82.09. It's when this number ultimately fails that you get the bigger move. Ex. Sell $85.9 OR break of $82.09 The R:R is sharply to the downside. But timing is everything here. If wrong, $102.4 target, if right $53.11 target.
NYMEX:CL1!Short
by mandelsc
Sell the News in Crude? Crude Oil (August) Yesterday’s close: Settled at 82.33, down 0.83 WTI Crude Oil futures violated the first of a series of major three-star supports early this morning at 82.04-82.46 but have so far responded to the next pocket in proximity at 81.66-81.71. Despite the constructive nature of recent price action, we are reducing our more Bullish Bias in order to see this near-term consolidation play out. While we remain bullish, at these elevated levels, we fear April’s technical resistance, a near-term 'sell the news' on Hurricane Beryl, eroding economic data, a narrative of rising production, and domestic political headwinds. The EIA’s Short-Term Energy Outlook is due at 11:00 am CT, the private API survey is released at 3:30 pm CT, and inflation data is expected from China at 8:30 pm CT. Bias: Neutral/Bullish Resistance: 82.82-82.86**, 83.16-83.45**, 83.69-83.88***, 84.38-84.52***, 85.27*** Pivot: 82.04-82.46*** Support: 81.66-81.71***, 80.97-81.21***, 79.90-80.18**** Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers: CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
NYMEX:CL1!
by Blue_Line_Futures