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Do you still think we'll see a notable pullback or is the current rally the start of covering by the shorts that you pointed out from the cot report?
Thanks, Kam. I sold puts that were bought Mon on Tues for over 80% gain-just too good to pass up. I should have reloaded fist thing yesterday but missed the opportunity. Have small amount as protection/hedge still, but looks like those will expire without a chance to cash in. Other recent uwti buys in the green though, so still doing well with it. I was thinking of buying calls this morning but didn't pull the trigger unfortunately. I see that it would have been a fast triple... Still trying to get the rhythm for this.
I really appreciate your guidance/suggestions.
Best to you,
-Tim
Kam, what is your expectation for the eia report today? Are you buying more calls this morning with the downdraft or just waiting to see which way it goes?
Thanks,
-Tim
Crude Inventory -2.5M Barrels vs -2.3M Expected
Gasoline Inventory 1.2M vs -1.5M Expected
Hopefully eia will show more of a draw. If eia is not favorable, I think oil could start a somewhat longer term drop now that it has remained below its rising trendline (and fallen) for over a week. This has been corrective so far but we might be in for a trend change?
API Crude Inventory -2.3M Barrels
Gasoline Inventory +805K Barrels
Distillate -484K Barrels
Cushing -84K Barrels
I see I would have done better with sco calls or uco puts than the uso puts. Probably depends on whether the drop happens immediately or not since decay will be an issue if several days. It will take some learning but I do like the added security having put protection. I prbbly need to increase the amount I purchase also. Looks like I should plan to have at least a 5% position in puts if I want to negate a drawdown in uwti.
How often do you end up with the options expiring without needing them? I assume when this happens, it prbbly means wti went in mostly a straight line up, so profits on uwti are enough that you don't worry about the loss of the puts. With rolling up to higher strikes on up moves, you recover some, but I know the value is prbbly much lower, so effectively there are some losses every time you do this. You are on top of the price action continuously, so maybe your adjustments based on expected moves makes this more effective for you, but I can't watch all the time and definitely not as good of a trader as you, so I will just plan to buy puts as a way to protect profits and give added peace of mind.
I really appreciate your comments and info. Thanks!
-Tim
I sold mine for a quick 110%. I bought some more auto to avg down on price and will pebble wait before I add puts back again.
Thanks, Kam. What timeframe on expiration do you use for puts usually? I know you roll puts upward after a move, but do you usually try to keep them at least a week or two out, or if you suspect a quick pullback (like for eia) are you buying them within the same week?
I figured you used options for different etfs/stocks. I was hoping you could give an example of what you bought here: underlying stock/etf, exp date and strike. I'm trying to see how I could implement similar strategy. I bought some puts on uso, but feel like it's prbbly under-protecting my position in uwti. If you can give an indication of how you pick your position size in the puts too, I'd really appreciate it.
Thanks!
What options at you buying, if you don't mind sharing?
Sold my uwti and switched back to dwti. In at 151.65.
Oil is sitting on hourly uptrend line. Out of dwti and bought uwti at 22.38. Looking for a bounce and then plan to switch back to dwti if we get overbought conditions.
Looking too much like bull flag with imminent breakout. Pulled plug and will look for entry on Mon instead.
You may be right, but it very often looks that way at major support/resistance. I would at least expect some pullback and I'll trade it that way until proven wrong. If it breaks definitively through this level, then I'll be back to uwti. I might have a little road rash but I won't let it bleed too bad either. Just watching closely and reacting to what I see on the charts.
I went ahead and pulled the trigger on dwti at 188. I'll add if we go lower but it looks like oil could have a decent pullback from here. I'm guessing it retreats then retests again with maybe a better entry/add later.
Sold at 1.99, for quick 10%+ gain. Don't trust it for continued run and will only look for quick turnaround setups.
Bought small position of uwti at 1.88. Just looking for a quick scalp.
I really appreciate the detailed response, Kam. I have never used the more complex options strategies like collars, so I'll have to read up on them and probably change the status on my account to allow this. I have done straddles (I think they're also called saddles) before, but only by buying the put and call separately. I like your strategy though and it seems like a great way to keep from getting burned on a trade. I have tended to do very short term trades in the past, mostly rather small positions, but it looks like we're entering a period where long uwti will be a very profitable LT strategy! It sounds like you've accumulated some for the long term... I hope to have a bunch of "free" shares as well at some point! Thanks again for sharing.
Thanks, YWC. I'm still curious about a particular example from Kam if he doesn't mind giving some details and how he selected it.
you've mentioned hedging a few times, and I'm curious what instrument you are using as a hedge. I looked at uso puts a while back, also sco calls, but the price seemed pretty steep to me for anything over a couple weeks out. Are you buying/selling options or something else? Would you mind sharing what a recent or typical buy/sell was in terms of the underlying stock/etf, strike price, and timeframe if you do use options? I'd like to consider doing similar, but not sure where to look or how to manage the trade.
Thanks!
I couldn't stay away with this quick runup back to what is turning into stiff resistance. Back in dwti at 207.67. Keeping a very short leash for now but if oil runs down a bit, I'll hold for the TL support i mentioned and will put a stop at my breakeven point.
Nice trade! I was tied up this morning and missed the entry.
I think we'll likely see some follow through downward on the current move to the 32.70-33 level at trend line support, price depending on how long it takes to get there. If wti breaks through that trendline from the past 3 weeks, it could go much lower. More likely imo is that level will be a great buy point to enter back into uwti. That's what I'm watching for anyway. I may reenter dwti if there is a reasonable setup, but may just wait on the sidelines until we get there and move back to uwti.
Thanks for the note, acrazjo. Nice trade!
I took basically the same approach as you when oil reached long term trendline resistance, but I got cold feet and jumped out too early on the trade and only made about 5%. I need to work on holding longer after I commit to a trade. It seems to be a confidence and experience issue for me, but I guess a profit is a profit... I think there could be more downside in oil still, but I didn't want to hold over the weekend and will reevaluate next week.
Looks like oil wants to climb. Out of dwti and back to uwti for another run.
It looks like yesterday in reverse. I got whipsawed this norning and lost a couple points, but looks good now. I'm thinking we'll get to lower mpd levels on this run. Could be start of a longer downturn though since we bounced from long term resistance.
Stopped back in on dwti, but will keep on very short leash until there are profits
Yup, I bailed on dwti. We're headed up further!
I added to dwti @ 216
Oil is right at tl resistance. If it breaks to the upside right here, it should run a few %, but if it doesnt get thru there will be a sizeable pullback imo
In dwti 240.30 Out uwti 1.64. Nice surge, but i think there could be a strong selloff.
You may have noticed the "Powered by Trading View" at the bottom of the chart. I find tradingview.com to be a great charting platform, and you can chart any standard indicators (up to about 15 per chart layout, and you can create several different layouts to allow different views/more indicators, etc) and can even create your own with a little programming. It takes a little time to get used to, but it's well worth it imo. WTI is charted under the symbol USOIL in tradingview, btw.
Thanks much. I really appreciate you sharing this with me.
This board is awesome! I've only been on a couple weeks and only make infrequent posts due to job and limited time, but people have always been very helpful and willing to share, and there doesn't seem to be a problem with egos getting in the way, which I found to be an issue on another board I was on. Thank you, RainerRocks, and thanks to everyone who contributes to this board.
That would be great! Thanks.
Thank you for the "rambling" and the very detailed response! I am familiar with vwap, but the higher value you mentioned threw me and I thought you were maybe looking at a different timeframe, which could be helpful. I use vwap +/- mpd for confirmation on buy/sell points, but always interested in learning more and especially what other traders use for signals.
I'll have to read up on the Ichimoku chart, it's not something I'm familiar with. Thanks again.
RainerRocks, You have mentioned vwap several times and seem to be referring to a daily value (?). My understanding was that it is only defined intraday (that's all I can get from tradingview anyway). After the morning flush, it was below 1.76 on my chart, but you mentioned 1.78. I was wondering where your numbers are from and if you are using a daily calculated value.
This was 10:00 to 11:00 for both.
Kam, there seems to be more to it. If you look at the last hour wti went from 27.65 to 27.74, a 3.94% gain. During same time, uwti moved q.36 to 1.45, which is only 6.6%. I don't think this is explained by what you were talking about, correct?
In 3KP1's post that I was asking about (post# 28244), he wrote "mms" which I took to mean the market makers. I do not find any info about their positions in the COT report though. I saw "Managed Money" and thought maybe this is what you were referring me to. Is there something there about the market maker's positions that I am missing?
If you could refer me to articles/books with a good explanation of how to read and interpret the COT report, I'd really appreciate it. I know people use this to help determine market direction, but I don't understand a lot of what is in the report.
Thanks for sharing. All the info from people on this board has been really helpful!
Thanks! I'll check it out.
I meant to ask thus morning but got sidetracked at work. You said mms were short and had to cover. How do you know this? Is there a site that shows the positions held by mms?
Thanks,
Dr. T