Long on Crude - 75% Fibonacci seg Long trade on Crude Oil -
1 contract Entry level on the break in of 75% Fibonacci seg
2 contract on the break in of 75.55 support price
R around 6
CLS1! trade ideas
CRUDEOIL FUTURE MCXCrudeoil above 6900 may see near 7000
Above 7000 it may see 7200
Overall trend is upside on 1 hour time frame
This chart is only for educational purpose
Gold Oil3.28.24 It is video I show you how I set up the gold chart Any oil chart. I think both markets are going higher even though there would be better entry levels and I show you where they are so that you could have gotten in at a better price with a high probability that the market would go your direction if you take in the trade at an easy to determine trade location. Since viewers come and go I decided to give a little bit more detail to how I use the extensions as targets.
liking those lows to push up here I am looking for the lows to get breaches to then push up to a discount for another push down. ping pong
OIL STILL BULLISH Oil hit a supply zone on the 4H timeframe during the yesterday’s U.S. session and sold off into the close & has continued falling in the Asian session. As of now it’s sitting around the $81 level and there’s a gap highlighted on the 1H timeframe that I have an alert set for! Unless some news develops till then, once the gap is filled I’m going long
A Renko Trading Strategy with Multiple Indicators (update 2)Repeatable patterns. Something to watch on the 25 tick / 15 minute Renko chart for CL. This first image is late January. I’ve marked some areas of interest and where we could be in the pattern and something to watch.
This is from today’s price action.
Pay close attention to the action of the indicators between the two highlighted periods of time.
Oil Boom! By 10 TimesWe are in a crazy market right now bitcoin
has just recovered from a crash
--
But be careful as you navigate the stock market
because I think this is going to be the last bull run
Before the US central bank decides to cut rates,
when that rate cut happens usually the stock market
vear market begins
and then this means there is blood on the streets
so prepare yourself for that
the oil price is following the rocket booster strategy as you can see
"What is the rocket booster strategy?" you may be thinking
Rocket Booster Strategy:
-The price has to be above the 50 EMA
-The price has to be above the 200 EMA
-The 50 EMA has to cross the 200 EMA
When you look at the chart above this is what has happened
and it has given us a buyer's signal.
Rocket boost this content to learn more.
Disclaimer:This is not financial advice you will lose money from trading please take this as a warning before you trade the financial markets.
CRUDE LEVELSCRUDE LEVELS.....
for 3days
Thanks to everyone for follow and appreciate....
Happy Profitable trading ......
Note:
This isn't financial advice, (not a buy or sell signal). This is only Knowledge sharing based on my knowledge and my risk management . Before following any ideas, do your own research and practice good risk management as of your financial status.
CL1! Move IncI use fibs to help time markets. Based on this, it helps me see when the moves are coming. Although,I Don't always know the direction. At any rate, the global economy seems to be on glass, and oil is the linchpin. A parabolic move higher could be from an oil embargo or a move lower could be by some major deflationary event. At any rate, Keep an eye on this in April
Jump on the Oil Trend as Russia Refineries Attacks Drive Prices I wanted to bring to your attention the latest trend in the oil market - prices are on the rise due to recent attacks on refineries in Russia.
These attacks have caused disruptions in the supply chain, leading to an increase in oil prices. This presents a great opportunity for you to capitalize on this trend and make some significant profits by going long on oil.
Don't miss out on this golden opportunity to make some quick gains in the market. Take advantage of the current situation and place your bets on oil to see your investments grow.
So, what are you waiting for? Get in on the action and go long on oil today
A Renko Trading Strategy with Multiple Indicators (update 1)This will serve as an update to the previous discussion specifically to some of the chart settings and the approach.
Going into the open on 25-March-2024, I was looking for price to move lower to test the monthly and yearly Camarilla R3. My reasoning was that neither seemed to have been tested yet and that these two together would provide a good level for support. My long term view on crude oil is bullish and I believed this type of action would provide a good entry point.
However, this plan did not come through so I stood aside to let the market playout to determine another entry strategy. While watching the market in the charts I had published earlier, I decided to make some adjustments to see if I would have detected the market’s plan sooner providing an entry point. The following are the changes that I’ve made:
Changed the timeframe of the Renko chart from 15 minutes to 1 minute. Without paying for a higher subscription in TV, 1 minute is as low of a timeframe as you can go with Renko. This alone changed the dynamics of the chart with a different view on the DMI and Stoch.
Changed the slower Stoch from 25,3,3 to 50,3,3 (which is a setting I’ve experimented with in the past.
The DMI remained the same as did the levels of importance for the ADX of 35 and 20.
Added the BPP (Bull Bear Power) indicator and set it to an interval of 50. I’ve not used this indicator before but was experimenting with some items yesterday and found this. I set the line to a step line and you can see the results here.
Added a 2-hour candle chart next to the Renko and will use it in conjunction with the Renko chart to make entry/exit decisions.
Removed the manual Linear Regression from the Renko chart and have added them to the 2hr chart. This is a more natural fit and have maintained the default settings. I have added two LR indicators with one at 1 STD and one at 2 STD.
Removed the manual drawings of the Camarilla pivots and have added them as indicators to the 2hr chart.
Removed the volume profile from the Renko chart and have added it to the 2hr chart with a week timeframe.
All markup for volume area, opening range, etc. will be put on the 2hr chart and will be for a weekly view.
The Renko chart will remain to work for timings of entry and exits. Considering the 1-minute chart, you can see that there was a buy signal across several of the setups.
As noted earlier, the consolidation on the 1 minute/25 tick Renko chart provided a signal that a breakout was coming. The slower Stoch set to 50,3,3 provided some insight into the direction with the break of the %k up over the %d and lastly, the new BBP gave an indication that the down move was a correction and that higher prices could be coming.
A long wick and breakout of consolidation would have been a trigger to enter a trade of buying a Call option (see green arrow on Renko).
Looking at the 2hr candle chart with the 2 linear regressions (1 and 2 STD respectively), then you can see where the support was formed then then where resistance was hit. The monthly and the weekly R4 provided resistance and now support is at the median of the current LR.
Because the break of the weekly R3 was with a force with no test, my plan now is to find an entry long (an August Call) along this line which is also the same proximity of the weekly Pivot and the top of the week’s opening range (where the opening range for the week is defined as the first 5 2hr candles of the week.
With a red brick in place on the 1 minute/25 tick chart, a green brick now would be a buying opportunity. I’ve added a consolidation channel across levels of what could be support for any pullback and could see another 25-tick brick in place before the green brick to the upside.
a daily price action after hour update - oilGood evening and i hope you are well.
Let me start today with a beautiful quote, which is often repeated in some form or another and indefinitely more people do not grasp.
As we’ve discussed, every security is a claim on some set of cash flows that will be delivered to investors over time. Yet at any given moment, the only two things that determine the price of a stock are a) the highest price the most eager buyer is willing to pay, and b) the lowest price that the most eager seller is willing to accept. If enough buyers are eager and enough sellers are hesitant, the price will advance. If enough sellers are eager and enough buyers are hesitant, the price will decline. It doesn’t matter why.
www.hussmanfunds.com
I recommended the market comment from John P. Hussman on x yesterday but i want to make sure, more people read it because it’s that amazing and free. Props to him for doing it.
wti crude oil
bull case: Bulls doing a good enough job keeping this above 80 and they got a retest of 82 today. Market is not accepting anything above 82 for now, but if bulls keep at it, something will give. We probably range more between 80 - 82 until a clear breakout and i think i can go either way. Bar 10 + 11 was strong enough that we could get a second leg up. We formed a good looking two legged pullback on the 1h chart and we could move higher soon.
bear case: Bears scalping at best here, it’s probably more bulls taking profit. They would need to get a really good close below 80 with follow through, for lower prices. Right now odds of that are very small. Best they can probably get is a trading range 80 - 83.
short term: Neutral with slight bullish favor inside given range
medium-long term: Market needs to reach the big bear trend line around 84 and we need to see the reaction there. It’s a bull trend but on the weekly it’s a weak looking trend with many overlapping bars. Could easily reach 84 and trade back down to 75 again over some weeks.
That’s it for today, have a good night and talk to you tomorrow.
Multi conformation analysis Crudeoil analysis
15 to 30 minutes TF bullish structure
Pattern type = bull Flag , Hed and solder
OIl Buy The Dips, Sell the RipsCrude OIl: Daily, Fibs & Indicators . . . Not as bullish as one would think. The move above the daily BB showed why you don't buy above the BBs . . . eventually, you get a correction. 3 days down for oil. The BB midpoint, yellow line, has been a support level for oil and will be interesting to see what happens down there. But, we are at a big resistance level based on the Oct - Dec 23 downdraft . . . so, we will be watching to see if we get support at 79.25 and then do we make a move back to highs at 83.22? That may be the trade in oil.
CRUDE OILPreferably suitable for scalping and accurate as long as you watch carefully the price action with the drawn areas.
With your likes and comments, you give me enough energy to provide the best analysis on an ongoing basis.
And if you needed any analysis that was not on the page, you can ask me with a comment or a personal message..
Enjoy Trading... ;)
Energy will drop below December lowsCrude Oil NYSE:CL and energy stocks can expect a drop now below the December 2023 lows to get the final leg down to finish the year-long correction since 2022. This is confirmed by NYSE:XOM in the monthly chart which shows that the long-term correction is not yet done.
Options Blueprint Series: Perfecting the Butterfly SpreadIntroduction to the Butterfly Spread Strategy
A Butterfly Spread is an options strategy combining bull and bear spreads (calls or puts), with a fixed risk and capped profit potential. This strategy involves three strike prices, typically employed when little market movement is expected. It's an excellent fit for the highly liquid energy sector, particularly CL WTI Crude Oil Futures Options, where traders seek to capitalize on stability or minor price fluctuations.
Understanding CL WTI Crude Oil Futures Options
WTI (West Texas Intermediate) Crude Oil Futures are one of the world's most traded energy products. These futures are traded on the NYMEX and are highly regarded for their liquidity and transparency. The introduction of Micro WTI Crude Oil Futures has further democratized access to oil markets, allowing for more granular position management and lower capital requirements.
Key Contract Specifications for Crude Oil Futures:
Standard Crude Oil Futures (CL)
Contract Size: Each contract represents 1,000 barrels of crude oil.
Price Quotation: Dollars and cents per barrel.
Trading Hours: 24 hours a day, Sunday-Friday, with a 60-minute break each day.
Tick Size: $0.01 per barrel, equivalent to a $10.00 move per contract.
Product Code: CL
Micro Crude Oil Futures (MCL):
Contract Size: Each contract represents 100 barrels of crude oil, 1/10th the size of the standard contract.
Price Quotation: Dollars and cents per barrel.
Trading Hours: Mirrors the standard CL futures for seamless market access.
Tick Size: $0.01 per barrel, equivalent to a $1.00 move per contract.
Product Code: MCL
Options on Crude Oil Futures : Options on WTI Crude Oil Futures offer traders the ability to hedge price risk or speculate on the price movements. These options provide the flexibility of exercising into futures positions upon expiration.
Constructing a Butterfly Spread
The essence of a Butterfly Spread lies in its construction: It involves buying one in-the-money (ITM) option, selling two at-the-money (ATM) options, and buying one out-of-the-money (OTM) option. For CL WTI Crude Oil Futures Options, this could translate into buying an ITM call or put, selling two ATM calls or puts, and buying an OTM call or put, all with the same expiration date. The goal is to profit from the premium decay of the ATM options faster than the ITM and OTM options, especially as the futures price gravitates towards the middle strike price.
Using call options would typically generate positive delta making the strategy slightly bullish. Using put options would typically generate negative delta making the strategy slightly bearish.
Selection of Strike Prices: Identify suitable ITM, ATM, and OTM strike prices based on current crude oil futures prices and expected market movement. (The below chart example uses Support and Resistance UFO price levels to determine the optimal Strike Selection.)
Determine Expiration: Choose an expiration date that balances time decay with your market outlook.
Manage Premiums: The premiums paid and received for these options should result in a net debit, establishing your maximum risk.
Advantages and Risks
Advantages:
Defined Risk: The maximum potential loss is known at the trade's outset, limited to the net debit of establishing the spread.
Profit Potential: Profits are maximized if the futures price is at the middle strike at expiration.
Flexibility: Suitable for various market conditions, especially in a range-bound market.
Risks:
Limited Profit: The strategy caps the maximum profit, which is achieved under very specific conditions.
Commission Costs: Multiple legs mean higher transaction costs, which can erode profits.
Complexity: Requires careful planning and monitoring, making it less suitable for novice traders.
The construction of a Butterfly Spread in the context of CL WTI Crude Oil Futures Options highlights the strategic depth required to navigate the volatile energy market. Meanwhile, understanding its advantages and inherent risks equips traders with the knowledge to apply this strategy effectively, balancing the potential for profit against the complexity and costs involved.
Market Scenarios and Butterfly Spread Performance
The performance of a Butterfly Spread in CL WTI Crude Oil Futures Options is highly contingent on market stability and slight fluctuations. Given crude oil's propensity for volatility, identifying periods of consolidation or mild trend is crucial for this strategy's success.
Neutral Market Conditions: Ideal for a Butterfly Spread, where prices oscillate within a narrow range around the ATM strike price.
Volatility Impact: Sudden spikes or drops in crude oil prices can move the market away from the strategy's profitable zone, reducing its effectiveness.
Understanding these scenarios helps in planning entry and exit strategies, aligning them with expected market movements and historical price behavior within the crude oil market.
Executing the Strategy
Executing a Butterfly Spread involves precise timing and adherence to a pre-defined risk management plan. The entry point is critical, often timed with expected market stagnation or minor fluctuations.
Entry Criteria: Initiate the spread when volatility is expected to decrease, or ahead of market events predicted to have a muted impact.
Adjustments: If the market moves unfavorably, adjustments can be made, such as rolling out the spread to a further expiration or adjusting strike prices.
Exit Strategy: The ideal exit is at expiration, with the futures price at the ATM option's strike. However, taking early profits or cutting losses based on predefined criteria can optimize outcomes.
Case Study: Applying Butterfly Spread to Crude Oil Market
Let's explore a hypothetical scenario where a trader employs a Butterfly Spread in anticipation of a stable WTI Crude Oil market. The futures are trading at $80.63 per barrel. The trader expects the price to move down slowly due to mixed market signals even though key support and resistance (UFOs) price levels would indicate a potential fall.
As seen on the below screenshot, we are using the CME Group Options Calculator in order to generate fair value prices and Greeks for any options on futures contracts.
Underlying Asset: WTI Crude Oil Futures or Micro WTI Crude Oil Futures (Symbol: CL1! or MCL1!)
Strategy Setup:
Buy 1 ITM put option with a strike price of $82.5 (Cost: $3.00 per barrel)
Sell 2 ATM put options with a strike price of $78 (Credit: $0.92 per barrel each)
Buy 1 OTM put option with a strike price of $73.5 (Cost: $0.24 per barrel)
Net Debit: $1.40 per barrel ($3.00 - $0.92 - $0.92 + $0.24)
Maximum Profit: Achieved if crude oil prices are at $78 at expiration.
Maximum Risk: Limited to the net debit of $1.40 per barrel.
Over the following days/weeks, crude oil prices could fluctuate mildly due to competing factors in the market but ultimately close at $78 at the options' expiration. The trader's maximum profit scenario is realized, demonstrating the strategy's effectiveness in a stable market.
Risk Management Considerations
Executing a Butterfly Spread or any options strategy without a robust risk management plan is perilous.
The following considerations are essential for traders:
Use of Stop Loss Orders: To mitigate losses in unexpected market moves.
Hedging: Employing alternative positions to protect against adverse price movements.
Defined Risk Exposure: Always know the maximum potential loss before entering any trade.
Market Analysis: Continuous monitoring and analysis of the crude oil market for signs that may necessitate strategy adjustment.
Conclusion
The Butterfly Spread is a nuanced strategy that, when applied carefully, can offer traders of CL WTI Crude Oil Futures Options a means to capitalize on relatively slow market moves. While the potential for profit is capped, so is the risk, making it an attractive option for those with a precise market outlook. It exemplifies the strategic depth available to options traders, allowing for profit in less volatile market conditions.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
Shrinking Inventories Lends Support to Oil PricesCrude oil prices have remained lacklustre and rangebound in 2024. Slow economic growth and abundant production have kept prices muted. OPEC's efforts of supply cuts haven’t helped. Neither have geopolitical tensions.
Over the past two weeks, oil prices have once more started to pick up steam, supported by trend of shrinking inventory. Despite the price buoyancy, we expect prices to remain rangebound with supply and demand in balance.
Yet even during these periods, positioning tactically can allow traders to harness positive gains. This paper posits a calendar spread in CME Crude Oil futures which provides a reward to risk ratio of 1.3x while remaining directionally neutral.
PERSISTENT GEOPOLITICAL RISKS FAIL TO INFLUENCE PRICES
While price, the options skew and IV may not reflect it, geo-political risk for oil supply has not dissipated. Geopolitics remains tense with the conflict in Ukraine and the middle east showing no signs of ending anytime soon. Cease-fire negotiations are stuck in a stalemate. Houthi rebels continue to target ships passing through the Red Sea.
Conflicts are dragging on. The risk of escalation remains high.
Earlier this year, Ukrainian drone attacks on Russian refineries reportedly destroyed approximately 12% of Russia’s total oil processing capacity. According to analysts , continued disruptions and attacks on Russian oil infrastructure is likely to pressure Russian production and exports.
Confluence of these risk factors suggests the potential for upside risk in oil prices. Yet, IV does not reflect this sentiment. CVOL index for CME Crude Oil options is at a four-year low and skew is close to zero suggesting demand for call options remains subdued.
Source - CME CVOL
It is difficult to establish a directional stance based on geopolitical risks given the fragile situation.
REOPENING REFINERIES PROVIDE MUCH NEEDED CRUDE DEMAND
Towards the end of January, a divergence in crude inventories & gasoline stockpiles started to emerge. US crude inventories saw large buildups while refined oil inventories had large drawdowns.
This suggested that while demand for crude products was strong, seasonal refinery outages meant demand for crude oil was subdued. The refinery outages were exacerbated by the cold blast in January which led to unplanned shutdowns. The impact – excessive buildup of crude inventories which led to bearish prices.
At the same time, inventories of refined crude products like gasoline showed that demand at the downstream has remained strong. Gasoline inventories have fallen sharply over the past month and stand near their 5-year lows.
Data Source - EIA
Over the past month, though, refineries have come back online much faster than anticipated. Refinery utilization rate has surged from 80% in early Feb to almost 88% as of 15/March.
Data Source - EIA
Increase in refinery utilization has provided much needed demand for crude oil. Crude oil inventories have shifted from their huge buildups to drawdowns over the past week.
At the same time, gasoline inventories continue to decline at a rapid pace suggesting strong fuel demand.
Data Source - EIA
In EIA’s weekly petroleum status report for the week ending 15/March, crude inventories fell more than expected (2 million barrels vs 900k barrels expected). The reason for the surprise – higher exports and refinery activity. This suggests that the demand for crude oil in the near term is stronger than many expected after the huge buildups in Feb.
OPEC+ SUPPLY CUT EXTENSION FAILS TO ENTHUSE MARKETS
At the meeting on 3/March, OPEC announced the extension of their voluntary production cuts till June. Cuts remain at around 2 million bpd, unchanged from previous guidance set in November 2023.
Despite the extension of cuts, crude prices remained muted. According to S&P Global , many participants were already expecting the extension.
Source - OPEC Monthly Report
Moreover, the recent non-compliance of production quotas by some members has become a major concern. In January, OPEC members exceeded their quota by 139k bpd. In February, members exceeded their quotas by 208k bpd.
Source - OPEC Monthly Report
Most of the non-compliance is coming from a select few nations - Iraq, Kazakhstan, Kuwait, the UAE, and Gabon.
Source - OPEC Monthly Report
Over-production raises concerns over seriousness to production cut commitments and its long-term sustainability. It is likely that over-production and the eventual roll-back of supply cuts will lead to a higher supply of crude oil later in the year.
HYPOTHETICAL TRADE SET UP
In the near term, crude inventories are likely to see increasing drawdowns given the rapid ramp-up of refineries and persistently high fuel demand. Outages in Russia are also impacting near-term supply on a global scale.
Yet the supply outlook later in the year is less promising. The compliance of OPEC+ supply cuts are fading. Seasonal trends show that crude inventories tend to rise during the summer.
Data Source - EIA
Investors can take advantage of these trends by executing a calendar spread consisting of a long position on near term CME WTI Crude Oil Futures and a short position on a later expiry.
Though, the backwardation on crude oil has become steeper over the past month, it potentially has scope to steepen further.
The following hypothetical trade comprising a long position on the near-dated contract expiring in April (MCLK2024) and a short position on the further dated contract expiring in May (MCLM2024) provides a compelling reward-to-risk ratio of 1.4x.
A calendar spread using WTI Light Sweet Crude Oil Futures is directionally neutral. It is also beneficial from a margin standpoint. CME offers margin offsets for calendar spreads due to its relative lower risk profile of the trade. The spread requires maintenance margin of just USD 40.
• Entry: 1.0063
• Target: 1.0135
• Stop Loss: 1.0003
• Profit at Target: USD 57.8
• Loss at Stop: USD 48.6
• Reward to Risk: 1.2x
MARKET DATA
CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
A Renko Trading Strategy with Multiple IndicatorsThis study will walk through several concepts in analyzing crude oil. The primary chart type will be a Renko chart with the block size (ticks) set to 25 (0.25 in TV) and with a timeframe set to 15 minutes. The significance of timeframe is that in TV, it will take this amount of time for the price to maintain a full block change (25 cents) in order for it to be ‘printed’. In times of high volatility, a 15-minute window can allow for more than one block to print at the same time. While this may be a disadvantage in trading CL futures either day or swing trading, it helps filter out noise in the type of trading I do. The basic strategy I’m wanting to establish using this setup is the buying of options, either puts or calls, that are as near to the market as possible and to limit risk to a % of the value of the purchase price of the option. So, for example, if I pay $2,500.00 USD for a CLQ24 85 Call, I will limit my loss to 10% of that price should the market go against what I had expected.
The chart setups and scenarios in this study will be based on Renko charts along with various indicators that will be discussed (for the most part individually).
A view of 2024 based on the Renko setup.
I will start with this basic view that has the Renko chart configured as outlined above with two linear regression drawings manually drawn on it. There is an indicator for LR which will follow each block change and change accordingly based on the lookback configuration. With the drawing tool, you can start and end the LR based on your strategy. In mine, I want to base the LR on price from a major low to a major high and then adjust based on if a new high or low is obtained. In this chart, I picked the low as that of late December (the first long black arrow). As an exercise, you can hit the new highs from this point to see how the LR adjusted and how future price flowed within it. There are two LR drawings on this chart; one with an upper and lower deviation set to 2/-2 and the second with a upper and lower deviation set to 1/-1 (these are the ones with dots for a boundary). In this specific chart, I’ve started with the latest high to be that on 01-March and with the LRs both extended to the right, you can see the price movement against these LR into the future. As price broke through the top of the LR recently, a new high was put in on 24-March and the adjustment of the LR will be shown next.
With this new high confirmed, the LRs are both move to end at this high while keeping the original starting point the same. In this view, price pulled back to the top of the LR 1std and close here. With the LR extended, you can see where the mean is and a potential price target if just considering the LR itself.
An expanded view of above:
Next, I’ll introduce the DEMA and simple MA on the chart. There are two DEMAs added to the chart with one set to a period of 12 and one set to a period of 20. The significance of the two is that when the 12 (black on this chart) is above the 20 (red on this chart), then the trend is bullish and when the opposite, the trend is bearish. I use these two more for confirmation than for timing. If you study these, you’ll see that they lag for the most part but there are key times that they will provide insight to the direction of a market during times of consolidation.
The next two indicators that I’ll introduce are the Stochastic and Directional Movement Index (DMI with the ADX). The experience of using these indicators on a Renko chart is like that on a candle chart except that the period is not for time but the number of bars that have been printed or committed. There are two Stochs used (5,3,3 and 25,3,3). The intent of the 5,3,3 is to provide a fast-moving change in momentum while the 25,3,3 is designed to provide insight to the momentum of the longer trend. Insight as to timing the entry and exit of trades may be possible with an in-depth understanding of the crossover of the 25,3,3 between the %k and the %d.
The DMI can be used like it is against a candle chart but with settings at 5,5. This provides a faster moving indicator and, with some study, can determine the importance of the interactions between the 3 lines. There is one key aspect of this indicator with the Renko that works similar to the candle and that is of identifying pending consolidation of the market. In a traditional setup of the DMI on a candle chart, the settings are 14,14 and the line of 20 in the indicator is traditionally the line of strength. Meaning that when the ADX falling at or below the 20 line, then the trends are weak and the market is entering consolidation. During this time, the guidance from various sources is to look for patterns on the market and signs of a breakout. For the Renko charts, the are to watch for trend strength and consolidation is between the 35 and 20 area based on the analysis I’ve done. On the following chart, I’ve highlighted some of these areas of consolidation.
Additionally, there is a notion of a high-swap of the +/-Dis which is when price has started moving strongly in one direction and then pivots to change direction and build into a strong trend from this. While in hindsight these look compelling, they can be difficult to trade in real-time, it’s difficult to differentiate between a high-swap and a future degradation of the trend that leads to consolidation. I think that the more reliable setup is finding the longer points of consolidation and prepare to trade in the breakout direction. As you can see on the close Friday, price has moved off of a new recent high and could now be trending down into a period of consolidation (if one were to use just the combination of the DMI and ADX).
If you’ve not read “Secrets of a Pivot Boss” by Franklin O. Ochoa, I would encourage you to do so as it has many extremely valuable and innovative ideas in trading off volume, value, and pivots. The following discussions will be based on concepts from this book.
The first covered will be that of volume area. I will not dig into the specifics of this but to just show one of the many indicators available in TradingView for these concepts. The volume indicators will work with Renko charts and the specific one I’m using allows me to set the increment of volume based on rows or ticks. I’ve chosen ticks and set the number to 5. With a 25 tick Renko chart, this will allow for a granularity of 5 rows per block for displaying the volume profile. In the chart below, I’ve highlighted a concept outlined in the book of the volume area that is extended out to the next trading day and is what forms the basis for 2-day volume area analysis. There are 6 scenarios that go with this analysis and the pink channels on the chart are intended to enable this view. The volume profile I’ve picked in the indicator is for the week so the analysis I do is for the week and not daily. One of the key setups from the book is an ‘inside day’ which you can see at the black arrow. An inside day is a day to watch for breakout (in this case it would be an inside week) and, after support was found, the price went higher.
The last set of indicators that I’ll cover is the Camarilla Pivots. These too are covered in depth in the book referenced above as well as a wealth of details on the web. These pivots do not work on Renko charts so I will create a candle chart with an 8hr setting and then set up the monthly and yearly pivots on it. From this chart, I’ll copy key lines over to the Renko chart.
This first chart is a view of the 25 tick, 15 minute chart going back to the beginning of 2024. I’ve labeled some of the key lines on this chart for both the year 2024 and the month of March.
This is zoomed into the month of March.
I believe a key concept that makes these pivots on the Renko with the timeframe powerful is the ability to see the tests that happen around the various pivots for both support and resistance. There is an entire trading strategy that is outlined in the book referenced above. The current price action seems to imply that price should come back to either the March R3 or the 2024 R3 (which is also the top of the value area for 2023). If price action does come back to these lines, careful attention should be paid to how support plays out and if a buying or selling opportunity arises from it.
Next, I’ll provide a view with all of the reviewed items in one view.
I’m standing aside on trading this for now until the current price action plays out and a cleaning view of potential trade comes into focus. Some observations considering what’s been discussed individually in this study:
The DEMA is currently swapped to the bearish trend.
The -DI is over the +DI which is a bearish trend. However, The ADX has been dropping to the 35 line but has not dropped in the 35 to 20 range to indicate a consolidation phase.
The Stoch has not completely bottomed out long term and could see more downward movement.
While price is at the top of the 1std of the LR, it could drop further.
A drop and hold of the 2024 R3, March R3, top of the 2023 volume area, and the median of the current LR (all would be within proximity of each other) could be a strong buy setup. A break below these lines with an ensuing test from the bottom could be a strong sell setup.
The relationship of the past two weeks’ volume area is bullish.
Crude Oil Trade Idea for Next Week - CL CLK2024 USOIL Crude OilThe weekly candle close this week respected the bearish weekly volume imbalance, respected the bearish weekly orderblock, and failed to close above the previous weeks high.
For this reason, I am targeting the PWL as a DOL.
I will be looking for price to trade up into H4 premium arrays and reject from them. Once I see bearish arrays being respected on the H4, I will look for m15 bearish displacement to confirm entry with the PWL as the target.
Breakout for crude oil in focusCrude oil has been grinding higher since the December low, but after a 4-week period of choppy trade momentum has turned higher.
Whilst $80 has been a tough level to crack in recent week, we suspect a breakout is now on the cards
- 200-day MA has provided dynamic support
- Falling wedge into 200-day MA
- Bullish range expansion out of the falling wedge
- RSI (14) curling higher from the neutral zone (50)
Prices are teasing the $80 level during a quiet Asian session. Bulls could either look to enter the breakout above $80 alongside rising volume, or seek dips down to the $79 handle / 2023 open price in anticipation of a breakout.
The bias remains bullish above the $200-day MA with $84 now in focus
Confirmed 4Hr Swing Bullish (BOS.X) Can we SHORT the Pullback..?NYMEX:CL1!
'Obstacles we jump on top of those, under no circumstance will we be stopped. We aiming for Excellence!!'
-Management500K
Family I hope we all are doing well in our individual lives and growing day by day...
In this CL Narrative I have developed, I will be breaking down why I believe the HOUSE can CAPITALIZE on a Counter Trend Pullback due to a confirmed 4HR Swing BOS.X to the UPSIDE...
***In my experience the market has to correct itself due to both parties having equal fair play. Buyers and Sellers that is...So when we have a confirmed 4Hr Swing BOS.X Topside, then I know the market will have a pullback as a corrective state then continue in the given trend direction wether it be LONG or SHORT...However in this exact case the trend is BULLISH but we are looking to capitalize on the SHORT PULLBACK....Here's what i'll be looking for vibe w/me...
1) Price is currently trading inside a HIGHER TF Daily Supply Zone...I want sellers to enter the market with strength & dominance & push the price of OIL down and break the Minor Support Level around ($80.40) and then break the 1Hr Demand Zone around ($80.25) with confirmed candle closures underneath both levels on the 30M TF Down....***If and when we can get the 2 levels of Support and Demand to fail with candle closures underneath, then this will be our 1st and 2nd confirmations to get ready SHORT...Also price needs to be trading underneath the RED V-Wap as a final confirmation to enter as well.
2) Once Sellers push price down& break & close underneath 1Hr Demand that will be all the confirmation I need to enter the Market SHORT on the retest of the Minor Support Level that failed previously around ($80.40) and target the 4Hr Swing EQ level...***Remember the whole point of demand is to push for higher pricing and break any form of SUPPLY in its way... Now if the 1Hr demand fails then that means the HIGHER TF DAILY SUPPLY is currently in control with the strong dominant hand & that is the hand we are looking to play along with and CAPITALIZE!
3) So if and when PA can give us the following sequence of events to take place; Where we can get the 2 levels of Support and Demand to fail with candle closures underneath, then this will be our 1st and 2nd confirmations to get ready & enter the market SHORT...As Daily Supply will be in control with the strong Hand and we will look to participate with this move on a LTF entry model....
Now the HOUSE can easily catch a solid +2-3R % Gain on this trade depending on your management system...
***Remember nothing in the market is set in stone, We play the Long-term game of probabilities...Let's stay focused and on point... Always Protect the HOUSE and trade the SYSTEM w/ NO EMOTION!!!
Now lets sit back N stalk like the SALTWATER CROC!
#BHM500K #NewERA
