The Bear

This frantic hedging could be dangerous too, since its difficult to know in some scenarios if your stop order is standing in the system or not, and what the spike will be like when it re-opens, and what kind of slippage you'll get. But it's probably better than nothing.

Or your stop could get blown away from a big gap in these 24 hr futures markets if it was set too close to the market. It depends on the market, some gap more than others...even if they are '24 hr' markets, there is a short period when they close then open again. Between this short period of time, gaps do occur in alot of markets.

In my opinion, no market is better than any other. We trade what we trade, and if we feel more comfortable in one than another - then stick with it. What you are witnessing with CL is a difference in leverage than the ES. Changes in gearing change the feel. For example if you want fast moves, then Henry Hub NG is the market for you. The leverage is high and the moves are fast even for 1 contract it carries good leverage. As far as getting fleeced in the energy markets, yes, with even a single contact like NG, if something goes wrong like a technical problem, you could potentially get hurt much quicker than 1 CL contract or 1 ES contract, simply due to the gearing. The gearing is higher, so if you get a runnaway market (and it happened to me once but I minimized the pain) and your stop doesn't execute, it can get a little hairy. But nobody should even enter these commodity markets unless they are aware of these risks, and are willing to lose that kind of money.

From my experience, CL is most of the time not trendy on intra-day time frames. There are some days where you get really nice trends, good quality, and on these days gains come quick and fast, but most of the time it's pretty choppy and erratic. It's like any market, you get good days then ugly days....

Just a word of advice Brown, don't get too excited over a week of oil trading. It's normal to have great gains in CL, but you need these to buffer the big losses you'll eventually get, and they will come sooner or later. The oil market is funny this way, you can get these huge gains but then it can evaporate quick. The swings are fast and furious but it's also great like you said if you don't like waiting. What I mean is, don't look at a weeks performance too critically. I would say, compare your results after 6 months of CL trading vs the Index trading.

I trade alone every day and I do watch CNBC every day. It's pretty useless in terms of helping me. I do like to watch Maria giggle though, and I like to see what Erin Burnett's wearing. For me, CNBC is just background noise. I also like to see all the idiot experts trying to call the tops and bottoms in the markets. It's fun. They are almost always wrong.

Hard to find any information on him, because he was so secretive. He never gave information out. He was like the Wheat king of CBOT. As far as those negative assessments of the other trader, most successful speculators back then were frowned upon in society. In fact, it probably stems from some of these guys, the way society looks down upon speculators. Alot of farmers were starving way back then, and guys like Cutten were making a killing at the CBOT. The agrarians blamed people like Cutten for causing the famine. The stock guys on wall street got it to some degree too, but it was more futures than anything. The worst was options....options were banned (futures almost banned too) back in these times, and people were trading them in the lobby and street of CBOT because they were outlawed for a long time. Again, because the US government thought they were immoral gambling instruments.

It's highly possible that the new pricing of oil is really reflecting this. The media likes to blame it on 'pure speculation', but it is the speculators and all the other market participants who are setting the price for the future. The point is, they say because it's just over speculation, oil will crash back down to $60.00 bucks soon, they are trying to 'blame it on something', to tell the public that it's not real. What if this never happens and it keeps slowly rising? Or what if the next pullback only stops at $80.00 then turns right back up again to take out the 100 mark? Alot of idiots are trying to pick a top in the oil market because they feel it's a fake bull market, but you know what happens to top pickers. This oil market feels like a runnaway train with no end in sight. I won't be surprised to see $150.00 per barrel within next year.

I would point your activities towards China. The China bull market is in the early stages, it's going to be a long game. Be prepared for big swings though if you are diving in the oil sector, and use good risk management or the gaps in the daily movements will scare you at first. I personally wouldn't go long on the oil sector stocks right now, it's feeling a bit exhausted (this is what I trade every day for position trades). Feel free to PM me if you have any basic questions. The stock markets tough right now in my opinon. I've just been waiting for the very bearish days and have been short selling alot, and not doing any oil futures trading this month. Once we clear $100.00 per barrel, if we can close above it, then next target $110.00 and im back in the game. But until then, there is some psychological barrier to $100.00...even though it's silly and it's just a number, i'll wait to see what happens. Everyone's fixated on it.

I saw it flashed again on the tv screen but they didn't say anything about it. Right around the close.

The Canadian Oil Sands has a ton of supply that is un-developed, but it takes big bucks and a ton of fuel to extract, and it's costly...but it's there, and I can't see how these reserves wont become increasingly important to our world. The actual reserves are massive.

Interesting stuff - i always wondered what it meant when Maria kept saying Trading Curbs Now In Effect.

True that. It's also those top grad numbskulls from MIT who provide me with their lost money. Unfortunately in this high stakes game of short-term trading, no university degree will gain you the holy grail. The game is old, but the players are always new.

Thanks for this post dogpile - maybe i'll check this out. I need a break from Nissons Japanese Candlestick Charting Techniques. It's taking me 2 yrs to finish the bloody thing.

In my opinion there is no insider info, because there is no 'new' energy right now. We probably won't see it in our lifetime, but you can count on these oil companies to suck it all the way to bone dry, to keep printing money, and make advertisements on TV about 'renewable energy' to delude the public that we actually have something PRESENTLY that can replace oil to sustain our standard of living. We have a bridge at best with our current alternatives. Many in the oil & gas industry are already aware of the problem, but they certainly aren't going to talk about it on TV, could you imagine....the fear, what would happen to the stock price...and a good portion of their savings. Officers with like 28 million dollars worth of stock in their own company. The public will be the last to hold the bag. I really hope the techno wizards can come up with something. I really am hopeful. The only time I could see oil going back down to 10.00, is when the final leg down takes us towards zero, because it's obsolete OR miraculously something is able to replace it....after of course all the black gold is almost gone. Remember, the world is ASSUMING that we actually have alternatives that can pack as much punch as oil, that are safe and practical. Maybe we could adjust our standard of living, but it's hard to make people change once their comfortable....then all the emerging nations that also want to be comfortable.

True - the main concern should be how much you will lose. But i will say that with YM, I find small stops tend to get whipsawed alot, unless it's one of those crazy days when the trends are perfect, but these days rarely happen. The thing with ES is, there are less ticks for equivalent distance of YM right? So this may completely change my dynamics. Meaning, let's assume YM is moving in tandem with ES. There's more ticks for YM because the resolution is finer right? Does anyone know if the asset value of the contract itself is similar to YM in size?

I'm going to try and sit and watch it starting NOV. and do some light duty trades. I like the idea of 12.50 per tick instead of 5.00 per tick. Not sure why I never tried it in the past, maybe because I started with YM and didn't bother to venture outside.

Interesting - i'll take a look at your posts. Ive actually never heard of volume based charts.

I sometimes use a 2-min chart in the past - and I when I checked the ES 2-min it looks very close to the YM 2-min.

Are you a female? If so please give me your TEL. I'm free tonight and I live in Toronto.

Thanks bros. Your posts help. I've been fiddling around and I'll keep you posted on my results. I tried the 1000 tick chart, but the range of the day from left to right was very narrow, meaning the whole days data fit on my one monitor. Do you think another way to do it is just put the YM chart up on the right monitor, then the ES on the left, then just adjust the ES by plugging in values, to visually make them match? Would this be a valid way to keep it somewhat similar in action?

Guys I'm looking at ES for the first time ever last night, and when I look at a 100 tick chart for ES in candlestick form, why does it look so square like and choppy compared to the same setup for 100 tick YM? Is there a way I can make the ES look like the YM chart setup?

Did you cover all your shorts rock? We keep marching higher and there's no indication of a substantial reversal. I have a target of 100

Doc i finally read this article. Here's my comments: >I cannot see how that does not cause more volatility This is purely an opinion piece. This person has ZERO DATA to back up their conclusions. >This will make the price become oversold to a point where value investors step >in and cause the stock to whip back up. The whip back up will be exaggerated >due to the fact that short-sellers now need to cover and buy at any price. This WILL do that, and this WILL happen. Unless you have access to the data that matters, it's impossible to come to these conclusions, even by looking at the TICK. I've been watching the TICK and the DOW for some time before the removal of the rule....and I've witnessed many 1000 readings. >The specialist and market makers have a new dynamic to contend with now >after the rule change. Before, they could see short sellers in their book >waiting for up-ticks to be executed. Exactly, they have some advantage here, and now it's been taken away from them for the better. Additionally all this talk about Specialist is sort of dated. The specialist system is slowly diminishing. The NYSE Hybrid system pretty much killed most of them. The floor is a very sleepy place these days, simply because they can't make as much money anymore. I personally would be OK to see all of them removed and just have IT guys operating the systems. I can't say for sure that they would have an advantage over a small speculator like me, because I have no data to back it up, but removing all of them LIKELY couldn't hurt me in any way. They had a reporter on CNBC trying to justify their staying there, as they were blaming John Thain or someone (one of the execs) for killing them. Their claim is that, when the bear raid starts, it would be that much worse if they weren't there. To me it sounds like a poor attempt to justify themselves.

Thanks doc. I'll keep you in mind when I'm taking my next toke. (Actually - i took a break over the summer and haven't puffed since June).