Chicagostock Trading

Chicagostock Trading

Oil's Target via T/A

 

A few weeks ago, before starting October, crude oil was sitting back at its 2014 lows of 9124, after rallying up to 10768, only to fail the retest of the 2013 summer highs.  This failure, and upside down U turn, led to a small consolidation period as short covering and new buyers materialized to put in a tug of war.  The 2014 reversal of 9124-10768 has a 1644 range.  Taking this range and subtracting it from 9124, this gives downside objective of 7480 to complete the expansion.  This takes place as the market made a technical reversal for the year of 2014 and failed to hold 91, seeing a flush, and expansion of the 2014 range, in the opposite direction. First level of major support is seen at 8090 with sell stops under 7728 to complete 7480 objective. Short term this support level offers an area for shorts to cover and buyers to look to defend, for a move back to retest 84-88 resistance, up to 91.  Failure to hold 7728 gives way to complete 7480 expansion target, which takes out the 2011 7495 low. 

 

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Pre NFP Market Update, SP500, Bonds, Midcaps, Yen

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CST Day Trading

Chicagostock Trading.

Instant message support/updates/livescreen and daily analysis. 

 

Alert/trade sent via AIM:

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Took all day to get that fill, however 7375 provided a level to defend on the short side. Since the risk is 4 points, if the market gives us 4 points in return, we scale out to lock in base hit and reduce exposure. Stops lowered to entry, allowing market to either continue lower to give the "homerun" setup, or move back to exit trade. 

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Crude Oil's Short Squeeze Trade

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Recall last week, just before the POTUS national address, crude oil fell into new lows for the year by 2 cents at 9122. The next day after the address, oil fell further down into 9043 before turning into a short squeeze as shorts began to cover their positions, sending the market back above into highs of  9344.

On September 10th, we wrote "With the Presidential address tonight highlighting need to attack ISIS, this gives bulls their last hope for a short squeeze/rally."

"Buyers must step in here to reverse through 9400 in order to trap shorts and attempt a short squeeze through 9600 to test next major resistance into 99-102."

In the above daily chart, the market shows the pierce of the 9124 lows on the 11th and the move up to 9367.  Today, the market retested those lows, allowing sellers opportunity to continue as well as buyers an area to defend.  The retest of last week's lows saw sellers fail to push through; showing some exhaustion on their part, as well as seeing buyers defend the retest.  This has thus far led to a squeeze back to the 9300 level allowing aggressive buyers opportunity to scale out. 

 

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Weekly chart shows clearly defined downward channel in CL from the failed retest of the 2013 highs in June of this year.  This week the weekly bar is seen pulling into retest last week's low and finding a bid. Small short covering as the market breached the 2014 lows and an attempt to create a failed break down under the January lows.  Buyers must look to recover and close above last week's high of 9394 to attempt a trap under the level and look to target 9600 for stops and a retest of the broken trend line from last year's lows with room to retest the broken 6 month vol window up to 10080.  Short term resistance met into 9280, squeeze through 9367 confirms Monday's lows as a successful test of last week's low.  New downside support based off Monday's cash session down to 9175 with sell stops below 9117.  Failure to hold the year lows and get through 9400 gives next major support into 8880.

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Crude Oil's New 2014 Low and Key Levels

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Crude oil made new lows for the year by 2 cents on Wednesday at 9122.  This is the third time the market has tested this level, June 2013, January 2014, and now.  To start this year, the market took out last December's low and turned the breakdown into a failure to go into a short squeeze leading up to 10754.  This was crude's second chance to retest last year's failed highs of 11224 as it tried to break through its weekly pennant to the upside.  The retest rejected with the highs being placed in June and the second half of the year July, beginning the liquidation lower.  The move down has been relentless as the market has been driven down below its weekly pennant and broken its trendline from the 2012 lows.  Short term, buyers must hold this new low by 2 cents at 9122 and look for a move through 93 in attempt for a short squeeze to retest 9400.  Failure to hold 9120 gives room into next major support at 8880. With the Presidential address tonight highlighting need to attack ISIS, this gives bulls their last hope for a short squeeze/rally.  ISIS continues to sell crude at deep discounts on the black market. 

 

 

 

Weekly chart on crude oil shows a clearer picture of the failed retest and reversal below the 2014 lows.  Buyers must step in here to reverse through 9400 in order to trap shorts and attempt a short squeeze through 9600 to test next major resistance into 99-102.  Next major sell stops in the market are below 8590 from April of 2013, which gives room down to major support at 8080 with sell stops below 7728 as the June 2012 lows.  Since the trend line from these lows was taken out, a pullback down to retest these lows at 8100 would offer buyers a strong level to attempt a bounce.  As July goes so does the second half of the year. 

 

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