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2024-09-17 - priceactiontds - daily update - oilGood Evening and I hope you are well. tl;dr Oil - Strong second leg up (daily tf) and bulls even tried to break above the bear flag but for now I doubt the breakout will be succesful. We are right in the middle of the broad bear channel and odds are 50/50 for either side. Above 72 odds rise for the bulls and below 69.5 I favor the bears again. comment: In my weekly outlook I wrote that if 65 holds, bulls are favored for 73 or 74. High today was 71.92. I doubt bulls are strong enough to break above the bull channel and make the pullback even steeper. 50% pullback from the selloff since 77 is around 71.5, so we are right in the middle of the broad bear channel. Odds favor the bears to test the lower bull channel around 70.5 again. If bulls fail there and bears can break below, we will likely see a retest of 67 or 66. current market cycle: bear trend key levels: 66 - 74 bull case: Bulls got decent follow through and they want an endless pullback for the bears and keep going until they hit the upper bear trend line around 74.5. They are trading above the 4h 20ema and every touch of it is bought. As long as they keep it above 70, higher prices are expected. Invalidation is below 70. bear case: Bears see this bear flag with 3 pushes up as done and the 50% pb is high enough to try for a continuation of the bear trend. Don’t be among the first to join them. Confirmation would be a 15m bar close below 70 and a break below the bull channel. Invalidation is above 72. short term: Neutral around the 50% pb 71.5. Bearish below 70 and bullish above 72. medium-long term - Update from 2024-09-08: Bears broke below multi month support and want a retest of 64.46 or lower. Right now the selling is a bit too steep to be sustainable. When we get a more complex pullback and form a decent channel, I will write a longer update here. Can this bear trend be the start of a bigger where we see Oil below 50$ again? I have absolutely no idea but the current daily chart can not not lead to that conclusion. current swing trade : None trade of the day: Buying the 4h 20ema is profitable again.
NYMEX:MCL1!
by priceactiontds
A New President's Potential Impact on Oil Prices1. Introduction The U.S. presidential election in 2024 is set to bring new leadership, with a new president guaranteed to take office. As history has shown, political transitions often have a profound effect on financial markets, and crude oil is no exception. Traders, investors and hedgers are now asking the critical question: how will WTI Crude Oil futures react to this change in leadership? While there is much speculation about how a Democrat versus a Republican might shape oil policy, data-driven insights provide a more concrete outlook. Using a machine learning model based on key U.S. economic indicators, we’ve identified potential movements in crude oil prices, spanning short, medium, and long-term timeframes. 2. Key Machine Learning Predictions for Crude Oil Prices Short-Term (1 Week to 1 Month): Based on the machine learning model, the immediate market reaction within the first week following the election is expected to be minimal, with predicted price changes below 2% for both a Republican and Democratic win. The one-month outlook also suggests additional opportunity. Medium-Term (1 Quarter to 1 Year): The model shows a significant divergence in crude oil prices over the medium term, with a potential sharp upward movement one year after the election. Regardless of which party claims the presidency, WTI crude oil prices could potentially rise by over 40%. This is in line with historical trends where significant price shifts occurred one year post-election, driven by economic recovery, fiscal policies, and broader market sentiment. Long-Term (4 Years): Over the course of the full four-year presidential term, the model predicts more moderate growth, averaging around 15%. The data suggests that, while short-term market movements may seem reactive, the long-term outlook is more balanced and less influenced by the winning party. Instead, economic conditions, such as interest rates and industrial activity, will have a more sustained impact on crude oil prices. 3. Feature Importance: The Drivers Behind Crude Oil Price Movements The machine learning model's analysis highlights that crude oil price movements, especially one year after the election, are primarily driven by economic indicators, rather than the political party in power. Below are the top features influencing crude oil prices: Top Economic Indicators Influencing Crude Oil: Fed Funds Rate: The most significant driver of crude oil prices, as interest rate policies affect everything from borrowing costs to overall economic growth. Changes in the Fed Funds Rate can signal shifts in economic activity that directly impact oil demand apart from the US Dollar itself. Labor Force Participation Rate: A critical indicator of economic health, a higher participation rate suggests a stronger labor market, which supports increased industrial activity and energy consumption, including crude oil. Producer Price Index (PPI): The PPI reflects inflation at the producer level, impacting the cost of goods and services, including oil-related industries. Consumer Sentiment Index: A measure of the general public's outlook on the economy, which indirectly influences energy demand as consumer confidence affects spending patterns. Unit Labor Costs: An increase in labor costs can signal inflationary pressures, which could lead to changes in oil prices as businesses pass on higher costs to consumers. This study exclusively uses U.S. economic data, excluding oil-related fundamentals such as OPEC+ supply and demand information, in order to focus on the election’s direct impact through domestic economic channels. Minimal Influence of Political Party on Price Movements: Interestingly, the machine learning model suggests that the political party of the newly elected president has a relatively low impact on crude oil prices. The performance of WTI crude oil appears to be more closely tied to macroeconomic factors, such as employment data and inflation, than the specific party in power. These findings emphasize the importance of focusing on economic fundamentals when analyzing crude oil price movements for longer term exposures, rather than solely relying on political outcomes. 4. Historical Analysis of Crude Oil Price Reactions to U.S. Elections Looking back over the last two decades, the performance of crude oil post-election has varied, depending on global conditions and the economic policies of the newly elected president. Notable Historical Movements: George W. Bush (Republican): In his 2000 election, crude oil dropped nearly 50% within a year, reflecting the broader economic fallout from the bursting of the dot-com bubble and the events of 9/11. In contrast, his 2004 re-election saw oil prices climb 21.5% within a year, driven by the Iraq War and increasing global demand for energy. Barack Obama (Democratic): After his 2008 election, crude oil prices surged by 33.8% within one year, partly due to economic recovery efforts following the global financial crisis. His 2012 re-election saw more modest growth, with an 8.3% rise over the same period. Donald Trump (Republican): His election in 2016 coincided with a moderate 23.8% increase in crude oil prices over one year, as the U.S. ramped up energy production through fracking, contributing to global supply increases. Joe Biden (Democratic): Most recently, crude oil prices skyrocketed by over 100% in the year following Biden’s 2020 victory, driven by post-pandemic economic recovery and supply chain disruptions that affected global energy markets. 5. WTI Crude Oil Contracts: CL and MCL Explained When trading crude oil futures, the two most popular contracts offered by the CME Group are WTI Crude Oil Futures (CL) and Micro WTI Crude Oil Futures (MCL). Both contracts offer traders a way to speculate or hedge on the price movements of crude oil, but they differ in size, margin requirements, and ideal use cases. WTI Crude Oil Futures (CL): Price Fluctuations: The contract moves in increments of $0.01 per barrel, meaning a $10 change for one contract. Margin Requirements: As of recent estimates, the margin requirement for trading a CL contract is around $6,000, though this can fluctuate depending on market volatility. Micro WTI Crude Oil Futures (MCL): Price Fluctuations: 10 times less. The contract moves in increments of $0.01 per barrel, meaning a $1 change for one contract. Margin Requirements: 10 times less, around $600 per contract. Practical Application: During periods of heightened market volatility—such as the lead-up to and aftermath of a U.S. presidential election—traders can use both CL and MCL contracts to navigate expected price fluctuations. Larger traders might use CL to hedge against or capitalize on significant price movements, while retail traders may prefer MCL for smaller, controlled exposure. 6. Conclusion As the 2024 U.S. presidential election approaches, crude oil traders are watching closely for market signals. While political outcomes can cause short-term volatility, the machine learning model’s predictions emphasize that broader economic factors will drive crude oil prices more significantly over the medium and long term. Whether a Democrat or Republican wins, crude oil prices are expected to see a potential increase, particularly one year after the election. This surge, driven by factors such as interest rates, labor market health, and inflation, suggests that traders should focus on these economic indicators rather than placing too much weight on which party claims the presidency. 7. Risk Management Reminder Navigating market volatility, especially during a presidential election period, requires careful risk management. Crude oil traders, whether trading standard WTI Crude Oil futures (CL) or Micro WTI Crude Oil futures (MCL), should be mindful of the following strategies to mitigate potential risks: Use of Stop-Loss Orders: Setting predefined exit points, traders can avoid significant drawdowns if the market moves against their position. Leverage and Margin Control: Overexposure can lead to margin calls and forced liquidation of positions in volatile markets. Position Sizing: Adjusting position sizes according to risk tolerance is vital especially during uncertain periods like elections. Hedging Strategies: Traders might consider hedging their crude oil positions with other instruments, such as options or spreads, to protect against unexpected market moves. Monitoring Economic Indicators: Keeping a close watch on key U.S. economic data can provide valuable clues to future crude oil futures price movements. By using these risk management tools effectively, traders can better navigate the expected volatility surrounding the 2024 U.S. election and protect themselves from significant market swings. 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.
Editors' picks
NYMEX:CL1!Education
by traddictiv
5
Is another oil price collapse approaching?If you would like to be notified whenever I post a new article, just click “FOLLOW” at the top. Also, if you would like to elaborate on a particular topic or need some advice, please comment below the article and I will be happy to help. Is another oil price collapse approaching? Despite a slight recovery in oil prices, prices still remain down 10 percent from last quarter. On Monday, WTI crude oil futures topped $70 a barrel, registering a 1.4 percent increase from the previous week. This was mainly due to oil infrastructure disruptions in the U.S. Gulf and expectations of lower interest rates in the United States. As a result, nearly 20 percent of oil production in the Gulf of Mexico remains offline due to Hurricane Francine. In addition, investors are betting on a Federal Reserve rate cut of 50 percentage points to stimulate the economy and increase demand for oil. However, concerns persist about slowing demand after Chinese data showed the longest phase of industrial decline since 2021, with lower-than-expected investment and doubts about whether China's growth target will be met. In Libya, oil exports declined significantly due to the impasse in UN-led talks on central bank management. The EIA provides valuable data on global oil supply, with some information that may be eluding markets. For example, global crude oil production peaked in November 2018 at 84.6 million barrels per day. In May of this year, world production declined to 81 million barrels per day. This indicates a slowdown in supply, and data on the number of Baker Hughes (BKR) oil rigs suggest that drilling activity in the United States is gradually declining. This may be good news, but the main problem is the declining demand for oil. Slowing economic growth globally has reduced oil demand, as evidenced by OPEC's consumption review. In particular, China-the world's largest consumer of crude oil-has been affected by the crisis in the real estate sector and the transition to cleaner energy sources such as LNG and electric vehicles. At the same time, the United States has seen an increase in oil exports due to its growing production capacity, putting bearish pressure on global prices and offsetting the production cuts decided by OPEC. Using technical analysis, we can assume that the price of crude oil will reach $72, which is a resistance zone, before a possible new downward movement. We anticipate possible weakness in oil prices in the next quarter due to unstable demand around $60. However, a change in OPEC policy could avoid this situation, with a significant cut in production. We will pay attention to the development of news on this issue. We look forward to seeing you in the next article! And remember, for successful trading always rely on TRADINGVIEW: an indispensable tool that can help you avoid serious mistakes during your trades. Translated with DeepL.com (free version)
NYMEX:CL1!Short
by Antonio_Ferlito
CYCLICAL ANALYSIS - Crude Oil to Go Up To Mid OctoberDISCLAIMER: This is not trading advice. This is for educational and entertainment purposes only to show how I view this market. Trading involves real risk. Do your own due diligence. My COT strategy has Crude Oil SETUP for longs if we get a TRIGGER (Confirmed bullish trend change). But what do cycles have to say about this long trade idea? Cycles suggest that we should see an up move in Crude Oil until Mid October/Early November. I look at many interesting things: -Using the DOW Arab Titans 50 index as a leading indicator of where Crude Oil may trade to. -The annual cycle of oil is strong and should not be ignored. It too is supportive of taking a long until mid October. -The Decennial cycle is supportive of a bounce in oil into mid October. -Major economic cycles & temporary trading cycles are also indicating an upmove could be imminent for oil. -Lastly, we see that the previous most similar year of price action (2019) suggests oil could move higher into October/November. TO BE CLEAR: This does not mean I am going long blindly, I wait for entry TRIGGER (18 MA, 10h8c MAC, Divergence). This market did already trigger via divergence last Wednesday via the CCI (Commodity Channel Index) divergence confirmation. If you have any questions about my cyclical analysis, feel free to shoot me a message. I hope you had a good start to your week. And as always... Good Luck & Good Trading.
NYMEX:CL1!Long
by Tradius_Trades
Oil Price Recovery Emerges Ahead of January LowThe price of oil recovers ahead of the January low ($64.37) to keep the Relative Strength Index (RSI) out of oversold territory. Crude Oil Price Outlook The price of oil extends the rebound from the monthly low ($65.27) to carve a series of higher highs and lows, with a break/close above $71.70 (61.8% Fibonacci retracement) bringing $74.00 (50% Fibonacci retracement) on the radar. A breach above the monthly high ($74.41) opens up the $75.30 (61.8% Fibonacci retracement) to $76.30 (38.2% Fibonacci retracement) region but the recent rebound in crude may end up short-lived should the price of oil respond to the negative slope in the 50-Day SMA ($74.73). Failure to hold above $68.50 (78.6% Fibonacci retracement) may push the price of oil back towards the monthly low ($65.27), with a close below $65.40 (78.6% Fibonacci retracement) raising the scope for a test of the January low ($64.37). --- Written by David Song, Strategist at FOREX.com
NYMEX:CL1!
by FOREXcom
Oil9.11.24 it turns out that this video only talks about oil. there were other important markets such as the dollar and the currencies and also some commentaries on other markets that I've been looking at when a routine basis with these videos.... but there were some special things that occurred on this particular Market and it gave me a chance to talk about my concept of the smart money that can do things with the price action that can really mess up your Trading because what is good for you in your mind really is a bad trade decision because you're not really thinking about how the smart money creates patterns that are great for them and bad for you. obviously I can't give you cause and effect.... I can only guess and since I'm giving you precise descriptions and how this can play out you'll see if it's working or not because I'm telling you much of it before the market has a chance to show you what I'm talking about. no matter how good this is I know that 90 something percent of the people watching will never do the work.... they never do the work and I know the outcome for them will be failure when it comes to Trading. most people cannot deal with failure and risk and other matter that makes trading so difficult. most people don't realize how difficult it is to make money Trading and they don't make the effort to do what successful people do... is to work hard and test everything that you think you need to know before your risk capital. in general the smartest most successful people in markets have no interest in telling you how to trade. trading Is Not a Love Fest. my experience after many years at this is that most of the people I paid money to in the first couple of decades of my trading experience we're generally very disappointing but at least they got paid they made money because I had to pay for their wisdom.... it's obviously not their trading based on my experience. this video turned into a comparison of a bear trap ...and a bear flag. I'm not really sure if I'm naming them accurately according to Convention. ... and it is well known that the relationship to Smart money and fast money is a well-known topic. the assumption is that the smart money does something that eludes the fast money.
NYMEX:CL1!
by ScottBogatin
2024-09-10 - priceactiontds - daily update - oilGood Evening and I hope you are well. tl;dr Oil - Bears in full control and the 4h ema is king. Bulls are also making money buying new lows, so we have some two sided trading, despite the bear strength. comment: 4h 20ema. Add that to your wti crude oil chart and trade it. Market is respecting it and there are amazing trades to be made. How long will it continue? No one knows but markets tend to do what they have been doing. Intertia. The bear channel is also looking good for now. Where could be the next bigger support for the bulls? 64.46 was my bigger target for the bears and they already reached it. The 2023-12 low is at 63.21 and the next support below would be 60. For now I think shorts are not favored near the lower bear trend line and I would only look for shorts near the 4h ema. Can you long this? You can but stop would probably be 64.7ish because 65 could easily get tested. current market cycle: bear trend key levels: 63 - 71 bull case: Bulls are content with scalping long at new lows. They are quick to exit once bigger bears come around and that’s why the selling ist mostly done via quick spikes (roughly 1h in length). Since we are at the lows of the bear channel, r:r favors the bulls for 67 or 68. Invalidation is below 64.7. bear case: Bears are in obviously in control. The selling is orderly with pull backs and we are in a decent channel down. Also true is that bears take profits at new lows, hence the pullbacks to the 4h ema. 63 to 67 was an area where the market produced a lot of tails below the bars in December and January. I doubt bears can continue this strong through that price area. Invalidation is above 68.8. short term: Bullish for retest of the upper bear channel and 4h ema. SL is 64.7. medium-long term: Will update after this week. current swing trade: None trade of the day: Once again, a short near the 4h ema.
NYMEX:MCL1!Long
by priceactiontds
Oil Prices Drop on Weak China Demand & Gulf StormOil prices continue to drop as weak demand in China persists, despite disruptions from Tropical Storm Francine in the Gulf of Mexico. Latest data shows consumer inflation in China rising slower than expected, with crude oil imports rebounding slightly from July but still weak on a seasonal basis. In the Gulf, oil and gas producers are shutting down platforms and evacuating workers as they brace for the storm. 📊 Technical Outlook: The market is approaching key support levels: • 38.2% retracement at $65.16 (2020-2022 move) • $63.64 (2023 low) • $61.74 (mid-2021 low) While these levels might hold during the initial test, it’s unlikely they'll prompt a reversal. With the market trading below the 200-week moving average and breaking the 55-month moving average, there's potential for prices to dip below $50 in the longer term. A negative bias remains below $84.52, and if support levels break, we could see a structural downtrend. Disclaimer: The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
NYMEX:CL1!Short
by The_STA