I'll hazard a guess that oil goes up from here to $104.80 to $105.00. This is the area it should bounce up to given the bearish thrust that happened last week. If it get's above this price the situation is no longer bearish, however if it is repelled by this price $85.80 is a valid target.
I only feel comfortable given these price targets for 24 hr intervals. This means I wouldn't be holding anything overnight. I'll be taking positions off at night and looking to re-enter in the mornings.
As I mentioned maybe 1.5 weeks ago now, it is about the dollar forming that base and rising up out of it. This morning, than anything else, the dollar is the thing to watch for all commodities.
For silver although I indicated I'm buying with an eye to holding until the summer, I have to pay attention to the new information the chart provides hourly/daily. In looking at the chart, even though silver is bouncing up right now, this bounce likely taking it up to the mid $41 area, a renewed thrust down could occur if silver is not able to get past this mid $41 area.
I say this because I expected stronger bullish movement Friday and it was a bit tame. A way to play this is to take all your money to cash approaching this mid $41 area and sit back to see what happens at the price. If it gets through, re-apply the long position, if not, short it down or wait for a final bottoming to occur... e
thxs, my lucky rabbits foot is still working:)
It was interesting watching today. It seems many are not convinced commodities go down from here because there was buying in spite of the dollar rise. Makes me believe that if the dollar rises more, the next down leg in commo's shouldn't surprise anyone in its severity because a lot of people are picking here as a bottom and when they find out they are wrong, the market will tumble pretty fast.
It's hard to say what is going to happen next week. Oil continues to make lower highs and lower lows, but is also currently trading near it's latest lower high, so could breakout of the downtrend. The new lows are a little too high for my taste. Short-term it looks like a coin flip, although the slow stochastic still isn't in oversold territory which usually means it will go down more. I also haven't seen the type of capitulation complete with everybody hating oil that would make me think we have bottomed. I really thought the bounce earlier in the week would lead to another plunge when it failed, but it didn't happen
I have no idea what the next week will bring, but longer term I believe any breakout will just complete the first wave in what promises to be several more as the QE II/$ weakness trade unravels. I would expect any oil rally to end in the vicinity of the 20 day just like the dips on the way up the last few months have. This of course assumes no ME or hurricane inspired buying. Basically I now believe you will not see a capitulatory plunge, but an extended grind down in the absence of some external event that causes a rush to the exits.
The dollar looks like it's going to rise right now. Of course, going long would be foolish in this scenario. Short is the play in this case. Seems Europe numbers changed the tide and frustration with greece.
I did manage to get that short yesterday within 1 cent of the low price and took home a healthy 5% on the short to add to 5% long early morning. I didn't advertise going long yesterday because I wasn't sure if silver would get to the low 35's as I said early morning. After all, when I posted, silver was a full two dollars lower. It was a gut play when I saw silver indeed had conviction to get to 35.x's that i decided to get long up to my short point. Only problem is I decided to trade only one account yesterday, but that's how i felt I should manage the risk.
It was a nice day:)
Today may be a trap.
Through multiple methods of analysis confirming each other, I've come up with the dixie heading to 76.91 from the current 75.23. A dollar rally to this height is sure to hit commodities with downward pressue, or is it?
The interesting thing is that as the dollar has gave a normal ebb down in its major march upward yesterday, the commodities gave the impression of a bottom at the same time(a number of them including silver and oil indicate they're ready to go up).
I'm in it for the profit.
The trap is: as the dollar gave a little zig down, commodities gave the impression of a bottom and if I'm right and the dollar rallies late day today or next trading day, many will be scrambling for the exits come Monday causing a gap down. that's the trap.
Of course, I have to ask myself is this one of the times when commodities will rise with the dollar or is the dollar rise a fake because as I signaled the dixie's bottom a couple of weeks ago it has been not that strong moving up.
How I'll play it today is to get long these commodities but by 1:00 to 1:30 close all positions heading into the weekend. Why? I believe the dollar is going to continue upwards within the next 48 trading hours and all those that got suckered into thinking this was a general bottom for the market today will be scrambling for the exits Monday which would likely be a gap down day for the market as the dollar rises.
If I'm wrong and the dollar continues downward from here or the commodities rise with the dollar, I'm ok with missing 2-4% and can easily enter Monday at higher prices. One of my rules is always preserve trading capital-don't hope for anything-hoping is for fools.
If silver gets past $36.45 it goes to $37.47.
Oil seems destined to $102.86.
If oil gets past
Closed my long and tried to get the short here in silver at the low $35 as i said earlier ($35.48 was my target) but I missed the low price on the etf by 2 cents..aghhhh.
Day is still early, maybe I'm greedy or something.
I have a downside target for oil to $85.15 but in looking at it more on a shorter term timeframe I see $92.92 as a price to watch.
For silver it is looking scary to me. Why? On the day I was saying it is a great buy and I'm not concerned with holding until the summer. admittedly I was a day early but bought on the second day which seemed to be a bottom. However, the fact silver fell through my bottoming day raised my eyebrow a bit. It became important to watch what happened on the next two days after the expected bottoming day. On the following two days as I had PAAS, SSRI and SLW up on my screen I saw price action in all three (but worst was slw) that institution were selling heavily).
Unbelievably the numbers that I crunched this morning suggest lower $20's for silver.
Don, I hope you saw my post on the day I said I went all to cash. If you are still in and wish to hold, I still believe august will see a thrust up that eventually topples $50 silver. If you're not liquidating, hedging with puts or buying a double down etf are wise moves.
I'm going to see if I can get short sometime today in the lower $35's silver (if I'm so lucky).
still all cash, watching for an oil and/or silver short and/or long TLT.
You can see the computer's fingerprints all over the trade in oil today. I could have drawn this chart this morning before we opened. First we traded down to the low yesterday and bounced, the failure there led to a quick move to the bottom of the channel, where we churned for a couple of hours, then when that failed we nearly plunged to the low we closed at Friday, then bounced back to test the underside of the channel where we now sit. If there was more time, I would say we bounce off the underside, and head for a new low, but with Nymex closed I'm guessing the excitement is over for today.