8-18-2010 Futures Technical Update!

RBOB continues to be week and after an the anticipated rally to work off oversold conditions we are seeing it continue its journey lower trading down almost 2% as I write this. On top of that Crude has broke an important support level at $75 after the API reported a build of almost 6 million bbls in the U.S. In yesterdays update I had said that /HO was not setting up as bearishly as /RBOB and still had a strong support level intact around 1.98-2.00 and that it was likely that we saw 2.06 before we saw the 1.98 again, I was wrong here. However /HO support still remains intact at 1.98 and unless this level breaks we should see high prices.

/HO
I think that support holds at 1.98 and the next target to the upside is 2.02 and then 2.05.

/RBOB
I hold my bearish stance on /RBOB and it continue to make lower lows on it latest down trend started 8-4-10 and believe it will be testing its May low of 1.88 very soon. If we get some real momentum to the downside in equities it could happen this week.

/CL
Last week crude had a sell off of better than 7% and continues to look week. Today after the API report last night crude is off about 2% and broke an important support and in my opinion physiological level of $75. This one is setting up identical to /RBOB and I have a downside target of 72-72.50.

On the economic and news front, today is a very light day. I will re-iterate that I believe yesterdays move up in equities, /CL, and /RBOB was just an oversold rally only to set up for a move lower. As we finish up the tail end of earnings season the market is running out of much catalyst to propel it to the upside and I remain bearish through the rest of the summer and into September.

Comments

WOW! I think that sums it up

Many of you have been reading this blog may have noticed that my blogging frequency has increased over the past few weeks as I got short the market. As you can imagine I am down money since getting short the market, this is the time when most people pull away from posting. But my goal is to stay active and involved and show you that trading is not always rainbows and butterflies. It is times like these that the things I have been sharing over the past couple of weeks are so important. You need to trade small relative to your account. I have a decent short position in the market and my portfolios are set up to make some awesome returns if we finally turn lower. But something I would like to point out is that my account is 70% Cash. I learned a long time ago how important it is to live by the rules you preach. Because of my discipline I am able to continue to hold my positions, I have time and capital on my side. I can't stress enough how important it is not to get to big....

Stay Small, Stay Out of Trouble

To expand on my post from yesterday about patience. I want to talk about a very important element that allows patience in a position, and that is staying small. If you trade too big RELATIVE to your personal account size, you are likely to be forced to exit the trade before the trade works in your favor. Many trades myself included have all experienced the pains of trading a position way too large given our account size. There is this predisposition out there that the only way you are going to make money in the financial markets is if you are trading 10 lots of options and 1000 shares of stock at the time. This is not the case, and if this is your mentality you will likely ensure yourself trouble. We have all read the stories of traders blowing up their account. I personally think a good rule of thumb is to not risk more than 5% of your account value on any one position. Good Luck Trading! In The Money Trades And 1 favor that we ask: If you like the hard work w...

more good news from FXStreet : Tom Fitzpatrick, senior technical analyst at Citibank in New York. Monday, July 15, 2002 "Parity is a psychological, not a technical level...and whether we pause around parity or not, we are likely to see significant further dollar losses...Our initial target is $1.03 to $1.0450. If that level is taken out, it actually casts a question mark against the whole of the dollar's rally of the last seven years, and could open up a full-blown bear market for the dollar." Julian Jessop, chief European economist at Standard Chartered Bank. Monday, July 15, 2002 "The dollar is under pressure from everything from economic problems to asset reallocation away from the U.S. and corporate accounting problems. It's difficult to see any positive factor for the dollar at the moment. The root of the problem is the U.S. current account deficit. If the U.S. doesn't have to attract an enormous amount of foreign capital, people wouldn't have to wor...

Forex Is Crazy

Search This Blog