One of the Weirdest Week on WTI I've Seen in Ages

[MichelGJulien 10]

It had been quite a while since I had aligned 2 consecutive days without a single trade. That speaks volumes about my degree of discomfort towards this news driven only crude oil market. Everything was about Syria this week and that made for a very bad trading environment with lots of volatility but no real conviction in either direction. In short, the worst of both worlds. John Kerry's Friday afternoon press conference did not clarify things really besides saying that Assad was guilty and that the credibility of the USA as the policeman of the world is at stake. I'm afraid all that is going to happen now is that we will get stuck with this uncertain thing hanging over our heads for a few more days/weeks...shit!

 

With war drums hardly beating anymore, we're likely to revisit the 105 area

 

Back to the market, it opened this morning at 108.17, outside yesterday's range and value area. The 2 gaps to be filled stood at 108.52 and 105.79. Only the one at 108.52 got filled. Right from the start it looked like this was probably going to be another chop chop session, with the end of the month books squaring, a 3-day weekend and of course Syria. And Lord was it choppy, especially after Kerry. Initial balance came in at 43 ticks this morning or 42% below its 10-day average. That's very much below average. That prompted me to tweet: "We are likely to get increased volatility later on". And of course as I said, we did. Technically, the charts haven't changed that much today. One observation: the $2-$3 "war premium" seems to be gone. In fact, we are more or less back to the price level we had prior to the beginning of the war escalation (constituted of jawboning more than anything else so far). Next week, volatility should be something to behold as well, so enjoy the long weekend!

 

I didn't take any trade today. Results: +56 ticks this week, +430 ticks in August and +1723 ticks since May 1st.

 

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[Blister 10]

I stayed out of CL this week. Too much geopolitical action.

[MichelGJulien 10]

I stayed out of CL this week. Too much geopolitical action.

 

Yes, unless you have a strategy to take advantage of the high volatility, it's better to stay on the sidelines