CLM15 futures has had an interesting run. Between July 2009 and Jul 2014, for essentially 5 years, Crude was mired in an $18.00 trading range. the onlhy exception was January 2011 until about August of 2011. For those 7 months, bulls were sucked into thinking we were going to run back to $140.00. Between Augus 2011 and July 2014, roughly 3 solid years, we were stuck in a box. $82.00 to $98.00. Bulls couldn’t even get another $100.00 print to celebrate in this contract. 10 months ago, Crude began it’s slide. Every new low was met with another “expert’ touting the bottom was in place. Looking at the charts, the charts don’t lie. 6-months and $52.00 later, CLM15 printed $47.00, $46.68 and then tested it again 3/16/15 at $45.93. Today we bounced to a 4-month high of $59.33. Significance? $58.55 was a 25% retracement. The next level to consider is the beloved 38% fibonacci retracment. For this contract, its $66.14. Next would be the 50% retracement. That comes in at $72.27. These may or may not come into play. If they do, they are opportunities to take advantage of market liquidity and interest by both bulls and bears. Take advantage of those levels to initiate a trade, or use it as a level to exit a trade. The specifics, I leave up to you. I’m just sharing the importance of these technical levels in today’s market. I like them because they are simple. If you don’t have e computer, you can figure it out with a calculator. I’m a big believer in KISS (Keep It Simple Stupid). I helps you maintain discipline buy having a simple cut and dry method for looking at trade ideas. These technical levels are important for one reason only. They are looked at by every one who considers themselves a “trader”. Doesn’t matter if you are 18 and green, or a 60 year old multi-millionaire managing 1Billion dollars. The levels are known. They are easy to calculate. Bulls and Bears alike look at these levels. They attract attention and they attract trade. In my opinion, they give you a reason to have the courage to put on a position. Period. Once the position is in place, its all about managment. Trade managment is 80 percent of successful trading. Trade selection, in these markets, is worth the other 20%. The reason is, that no matter where you get in, no matter if you are long or short, you are going to take heat. HFT and the nature of computerized markets guarantee that you’ll take heat. Right or wrong, you’ll take heat. No one consistently sells tops and buys bottoms. At least no one who’s honest. So, with that on the table. Let’s look at some technical “targets” for the upside in CLM15. This chart shows the “box” we were in for 3 years. It also shows the break and the retracement levels that I discussed above. There is a reverse chart and reverse action which corresponds with the US dollar. I’ll post that tomorrow, but for now, when people ask, “What’s next for crude?”, these are reasonable “guesses”.
CER