January 24, 2007
The Importance of Monitoring Oil Intraday
Day traders who were happily long during the morning with a nice broad market tailwind behind them received a jolt around 2 PM when oil turned higher and the tone took a nasty turn. A scramble to raise stops probably saved the day from turning into a loss for most. If you haven’t put USO on your “front and center” quote sheet, you should.
January 24th, 2007 at 10:23 pm
i was long and those red intraday bars got me out right before the ramp
January 24th, 2007 at 10:27 pm
pete: Yes, well the 5-min. is a very small time frame which whips folks to death.
January 25th, 2007 at 6:08 am
Gosh, I just couldn’t be a day trader. I love the idea, but don’t have the mindset for it. Plus, living in a high tax state like californa (9.3% tax on cap gains - lt or st) also would put a damper on it. My opinion on day and swing traders is not one of disdain, though. I think they provide a very useful purpose by tightening spreads. The specialist be damned, the day trader has taken over.
January 25th, 2007 at 7:51 am
TBB: Yes, day trading requires a certain kind of temperament and the sooner people realize they don’t have it (that would be about 99% of the population), the better.
January 25th, 2007 at 8:47 am
you could be right, but as we saw on 1/24 oil went up and stocks went up too. I find it doesn’t pay to think too rationally in the short term, just trade the chart you are trading and forget about oil, bonds, etc. on 1/23 there were plenty of short term patterns signaling the sell off in the naz, and one could have caught it without looking at oil. Thanks for your great site.
January 25th, 2007 at 9:00 am
charlie: I agree for the most part, it was just that on 1/23 things went bad precisely as oil began to move … I didn’t see anything else that explained that unusual mid-afternoon reversal but oil. If you can share an example of one of those “short term patterns signaling the sell off in the naz” I’d be much obliged.
January 25th, 2007 at 11:07 am
sure, I like to use the 20 period ema on all my charts just for reference, the 60 min nd 100 futures were coming up to it prior to 2pm on the 23rd, so I was looking for signs of resistanct there for another move down. so then i went to a shorter timeframe to look for something, and found a 15 min macd divergence and then went to a five min, and found a doji in msft, so, when the five min nd 100 seemed to confirm with a mini trend break, I figured the 6o min chart would take another test down. as always,have to use stops in case one’s analysis is wrong. (also, thanks for bringing the john macdonald books to my attention, I have enjoyed a number of them already)
January 25th, 2007 at 11:10 am
pit session only in the nd 100 60 min chart, btw.
January 25th, 2007 at 1:57 pm
charlie: OK, thanks for your insight, and you’ll be happy to know that I’m going to post excerpts from The Quick Red Fox soon. ;-)