USOIL - Price dropping soon?How much higher will we go?
Price has printed a rising wedge pattern indicating exhaustion in the market. We will be waiting for a break of trend with corrective structure to the downside.
USO
Long Term Bear, do not hold 3x futures based productsI enjoy trading DRIP and I believe long term, oil is worth less than today. ESG is a movement that will continue, especially when it comes to China and India's eventual and inevitable higher participating in the space. Day trade DRIP, but do not hold. The issue arises from the cost to roll the futures and the cost to leverage the future or ETF into a swap that returns the 3x. The cost is high, the slippage is insurmountable, and the product will deteriorate even if you chose the correct trade. Examples of this are everywhere. Trade events and noise, it is a risk / reward play. Saudi oil field was the last great play for this product, any large move up in CL1 would be a short term long DRIP. If you chose to trade the technicals, do not use the ETF, but CL1. This includes USO, this will also deteriorate away from CL1.
**no position, but always waiting
**happy to share further details on this topic and how these products function
THE WEEK AHEAD: UBER, BIDU, ROKU EARNINGS; USO, XOP, /CL, VIXHIGH RANK/IMPLIED EARNINGS:
UBER (--/74):* Monday, After Market Close.
BIDU (59/42): Wednesday, After Market Close.
ROKU (72/85): Wednesday, After Market Close.
The Plain Jane ROKU December 20th 120/190 short strangle camped out at the 20 delta pays 8.55, but there is some call side skew there that you may want to accommodate in some fashion, for example, via ratio (the December 20th 2 x 105/185, 8.79 credit, -1.64/26.15 delta theta) or by going half as wide on the call side as on the put with a defined risk iron condor (e.g., the December 20th 110/120/185/190 pays 2.09).
The BIDU December 20th 90/120 short strangle pays 2.33 and the UBER December 20th 25/39 pays 1.45.
Naturally, you'll probably want to adjust strikes a smidge running into earnings, depending on how much these move between now and their respective announcements.
EXCHANGE-TRADED FUNDS:
SLV (51/24)
GDXJ (40/31)
GLD (40/12)
GDX (38/27)
TLT (34/11)
USO (29/35)
XOP (24/34)
First Expiries In Which At-the-Money Short Straddle Pays >10% of Stock Price:
SLV: April (165 Days), 2.10 versus 16.92 spot (12.4%)
GDXJ: January (75 Days), 4.75 versus 39.40 spot (12.1%)
GLD: January '21 (439 Days), 17.48 versus 142.56 (12.3%)
GDX: January (75 Days), 2.91 versus 28.01 (10.4%)
TLT: January '21 (439 Days), 15.43 versus 140.56 (11.0%)
USO: January (75 Days), 1.38 versus 11.69 (11.8%)
XOP: December (47 Days), 2.25 versus 21.85 (10.3%)
I'm naturally not going to go out 439 days in either TLT or GLD to sell premium, but set them out there to show where the best "buck bang" is. If anywhere, it's shorter duration in GDXJ, GDX, USO, or XOP.
BROAD MARKET:
As with last week, <45 Day duration broad market (SPY, QQQ, IWM) isn't paying here. The shortest duration in which the at the money short straddle pays greater than 10% of where the underlying is trading is out in June (228 Days) in either IWM or QQQ. I reluctantly put on some QQQ last week (see Post Below), with the intent to manage these longer-dated setups far more aggressively than I would a shorter-dated one, taking profit at 25% max as opposed to waiting for a full 50 or more.
Pictured here is an IWM June 19th 135/2 x 185 ratio'd short strangle with the short put around the 16 delta, the short calls doubled up at the 8's to accommodate skew. It pays 3.77 with break evens at 131.23/186.89 and delta/theta of 2.55/.73.
FUTURES:
The premium selling picture is basically the same as last week and mirrors that in the exchange-traded funds, with /CL paying in shorter duration, but not much else.
VIX/VIX DERIVATIVES:
There are viable term structure trades in VIX in the December, January, and February expiries where the correspondent /VX contracts are trading at 16.16, 17.37, and 18.02 as of Friday close. It is otherwise one of those rare moments where it might be worthwhile to consider a bullish assumption play in VXX or UVXY with VIX approaching 2019 lows around 12 (See Post Below).
* -- UBER hasn't been around for 52 weeks yet, so there is no percentile/rank for where the 30-day lies.
cl, oil, trading Nov 1stOil is having a strong up move taking us to a higher distribution and if we remain above the Red zone top I think we could get to 55.30.
In the event we move back inside the red zone very likely chop.
Move below red bottom only think we get to first lower blue target.
Trade I like is a test of Red top for a long!
USOIL Price Action Analysis | A Relative Long Term IdeaCrude Oil has found a support on the Equilibrium Zone of the Trading Range, again. This accumulation in the upper range seems like it will coming to an end. On the other hand, it needs to reclaim the Pivot first and then the Range High.
Entry: 54.6
SL: 49.9
TP-1: 62.4
TP-2: 66.4
TP-3: 72.4
TP-4: 81.4
R/R: 5.7
Please let me know if you have any suggestions or any ideas to add. I can also give you more detailed explanation for this specific trade setup.
The ideas published here are not financial advices.
cl, oil, trading for Oct 20thToday due to oil inventor report at 10:30 and interest rate announcement at 2:00 the red zone will be larger, And this also makes since seeing that after RTH session yesterday we forma big balance zone.
I will be careful today but until we clear this zone will be looking for trades back and forth inside the red zone.
oil, cl, trading for Oct 29thwe are moving in a downward direction and could see this continue to at least 54.25 area. I would like to see a bounce up to short but will see how we act around the red zone. a move back above 55.60 should take us back into the upper distribution and have us enter chop around 56
oil, cl, trading for Oct 28thThe current move is long in a balancing consolidation and will need to move above the red zone for further up move . If we can not get back above I will be looking for oil to consolidate and then test lower prices again, and as a guess only I thin the 56 area could be oils happy area for a while.
cl, oil, trading for Oct 25thOil is trading in a consolidation at the top of this current range and looks like it wants to go higher. Will look long up to the 57 area on any action showing long prints
cl, oil, trading for Oct 24thOil on a strong move as mentioned one should be coming and now doing a formation of a flag that could provide a further move higher. Inside the red zone are 2 of our prior support and resistance lines(blue) and figured i would leave them on the chart today.
I will be looking for a pull back down that I will be watching to see if it holds so I can get long, this might be a trade that goes past a day trade.
USO --- pressure in the Middle East, nothing but a distractionlets see if WTIUSD hits low to mid $30s; then time to long
Oil correction then bull for years?$uso $uwt $dwt $usoil
Potential descending triangle on OIL. Correction to the 30's? Massive bull run and breakout above? I think we'll see oil hit 64-65 before correction next few months and landing sub 40. How low that goes is not important.. This pattern should be concerning.. If oil ultimately breaks above (hmm, what would cause that), it's going to come at a heavy cost to the global economy. Not pretty...
ECA +36%: New bull market in Natural GasHave a great day all and don't forget to check out the video linked below.
Rob
XOP: will buy XOP around tomorrow noon Sep/10 2019Maybe before EIA report, there will be a good enty
cl, oil, day trading for Aug 21stOil has moved up into a very balanced distribution and is now looking to resolve one way or the other. This 45 tick range will most likely not contain oil prices today and will provide a good breaking trade opportunity. will watch for a impulsive move and trade the follow up to that break with trail stop tightening near marked targets.
Crude Oil Monthly In Descending WedgeWTI linear scale monthly study highlighting descending wedge and ascending channel.
Oil forming a descending triangleOil is still in no man's land, seems to be forming a descending triangle, I see three possible scenarios. At this point oil is best day traded as there seems to be indecision on where this market is headed.
Messy Oil Messy Chart! WHats in the cardsI posted recently the neck was broken on oil. The bears made out big! Now Bulls it looks like it is your turn. Volatility. I see $57-$58 for the bull run let's see! See my posts below to see the current Geometrical Frequency of Oil.
-Coach Reeves
