Keep Calm and Don't Move Your Stops.....

A little risk management saves a lot of fan cleaning!

The Purpose of Life is Joy!!

Thursday, January 26, 2017

+2RR

Based on the daily chart which has been forming a pennant since the 3rd of January, last night I figured we either had a big down day to the 52.00 area if the upper side of the wedge held or a break out day to the long side if it failed....as it turns out, the entire candle is forming outside the wedge to the long side so I knew I wanted to be long.

I bought 53.08, stopped out for -1RR, and then bought 53.23 off the one minute chart because I didn't like the large 40 tick 5M candle. Based on the potential break out day today, I decided to move my targets out to 3RR to see if I could capture a slightly larger piece of any break and run. I got the 3RR target, recovered the 1RR loss and done for the day.

Normally I'd stick with the 2RR and finish with 1RR which is fine with me but I was fairly certain it would break and run a bit based on the daily chart and I got it right.

I think perhaps a bit of luck was in play today with how the second trade worked out. I was buying pretty far away from higher time frame support so I was banking on the much shorter time frame support areas holding....they did and it worked out.

Cheers and time to study.


A bit of a macro look for you today courtesy of Capitalist Exploits.

"And this is where I want to bring to your attention today - the disconnect between the dollar and oil.

We know that oil trades inversely to the dollar.
Now, take a look at speculative long positioning in oil.
Whoah! Something is out of whack!

So now we have a conundrum: The market is long the USD and it's long oil.

Markets are like wives. They exhibit just three outcomes: Happy (up), grumpy (down), or neutral (sideways).

One of these outlooks is wrong.

Either the dollar longs are wrong and oil goes higher, in which case those speculative oil longs are right.

Or oil goes lower and the dollar goes higher.

The third option is that over time the speculators slowly reduce positions and we get back to levels which don't exhibit such extremes. That can easily happen.
One other interesting factoid is that the physical producers are currently the shortest in history. (Emphasis Mine)Hmmm, out of whack!"



2 comments:

  1. good recovery

    about capitalist exploits - chris usually does good stuff , but on this he is too close to the markets.....co-relation is possible but not necessary.

    and he most certainly does not get TA, because wouldn't have put that post up. I almost wanted to email him after I read that garbage he posted, but he might have taken it personally (esp if I called it garbage to his face - LOL).

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    1. I'm not a macro analyst so I didn't really pay that much attention to the overall thrust of the article but what I did think was a bit odd was the market is long oil but the producers are short. I find that interesting purely as a point of interest. Something to watch over the next few weeks and months. I used to spend a lot of time trying to predict the long term movements thinking it would help my short term trading. Wrong!!!! So now I just observe without forming an opinion or at least a strong one!.

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