CL trading day October 25 2017 PM

posted in: Market Recap 0

Oil inventory release number …

Today’s context at open :

  1. Oil inventory number release ( 10:30 EST )
  2. 7-Day balance ( 52.64 – 50.94 )
  3. Weak and poor high ( 52.56 – 52.55 )
  4. Overnight inventory short. ( Pivot 52.32 )
  5. Short term inventory long
  6. Monthly and weekly in balance
  7. Open inside yesterday’s range

We opened right at yesterday’s halfback which calls for patience trading. Chop is anticipated and oil inventory number is released at 10:30 which will bring extreme undesired volatility so sitting on our hands is not a bad idea.

I will take this moment to talk about the importance of the opening level in our contextual analysis of the market. This comes from a Jim Dalton article :

Opportunities that involve longer timeframes versus the shorter timeframes:

 

Is the market opening in or out of yesterday’s range.

 

Opening outside of yesterday’s range will certainly garner more attention and excitement than opening within yesterday’s range. This is far more likely to galvanize a directional opinion than opening within yesterday’s range.

 

  1. If the market opens outside of yesterday’s range and doesn’t trade back into the range, conviction is likely to be high in the direction of the breakout.
  2. If the market is driven back within the previous day’s range the day timeframe confidence is more likely to be high that prices are too high.

 

Markets that open within balance (within the previous day’s range) are far less likely to initially involve the longer timeframes. At the lowest extreme the market would be dominated by the day timeframe traders; it is rare that this timeframe can dominate for the entire day making it important for us to learn to recognize when subtle or maybe not so subtle shifts in control begin to appear.

Once the number was released the market showed no directional conviction as “D” period set the new range for the day confirming the rotational nature of the market with 4 TPOs across at the intraday POC.

My trading range was set to the Overnight inventory pivot at 52.32 and yesterday’s low at 51.78 waiting for the POC migration to give me more informations.

The market didn’t offer lots of opportunities but “G” Low and “H” high offered good price locations to trade my trading range extreme.

 

Good Trading !