The Fed Meeting Induces Paralysis Again in the Oil Market

[MichelGJulien 10]

Yesterday on StockTwits I mentioned that: "Remember tomorrow we have the DOE inventories at 10:30 and the Fed at 2:00. Could be rocky or dull but not "normal" conditions for sure". Well, we had pretty much a state of paralysis all session long except for the time periods surrounding these 2 events where the market got more active, jumping up and down like the psycho it has become thanks to algos trading and stuff. The general downtrend on crude has resumed for the time being and a retest of last week low at 95.95 seems to be in the cards. Of course, that test cannot be taken for granted because of all I just mentioned concerning algos and stuff. Under normal conditions we should retest last week's low is what I just have written really.

 

Although very oversold on the 4hr chart, a retest of 95.95 is a given

 

Technically now, the market opened at 97.33, i.e. way below and outside yesterday's range and value area. The gap from yesterday's close was standing above at 98.25 and was never challenged. One thing worth of mention is the fact that Initial balance came in at a microscopic 28 ticks (smallest ever in my stats going back a year). Thus I concluded that volatility would be back for sure later during the session but, again today, it didn't because of all that garbage surrounding the Fed's decision. For tomorrow I expect a continuation of the downtrend and a probable retest of last week's low as i said earlier. Resistance above is in the 97.10/30 area, so that could be a nice spot to sell should we get there overnight.

 

I took 3 trades today:

 

1. Long 97.40 at 9:51am, exit 97.15 at 10:19am for a -25 ticks loss.

2. Short 97.15 at 10:19am, exit 97.20 at 10:30am for a -5 ticks loss.

3. Long 97.20 at 10:30am, exit 97.40 at 10:34am for a +20 ticks profit. Result: -10 ticks today.

[JamesBrrando 10]

Thanks for the update.

[MichelGJulien 10]

My pleasure dude :-)