Crude Oil March 20

[trader273]

James,
Do you use those moving averages for trade ideas? I used to use (read: attempt to use ) moving averages but could never get profitable with them.

[james_gsx]

It really depends on the market and how it's acting. For example last summer it was really easy to use the 8 and 21 EMA for the YM. I could simply (I stole this from John Carter) buy on pullbacks to the 8 EMA. CL you could do with pullbacks to the 8 and 21. But now they almost seem irrelevant since both the YM and CL seem to range more than trend.

The 50 and 100 EMA were plotted for the YM and ES, but since I use the same chart for all daily time frames it shows up on the CL chart as well. They work well for support and resistance levels as you can see on the ES. For the CL I guess you could say they are just there as they haven't been needed lately. Although the 50 did provide great support.

But on a normal trending market, yes I would use them. Just like any "indicator" though, they are more of a guide.

[james_gsx]

Looks like that short is working out well. If the low of the spinning top from yesterday was broken you could think of a possible short to the 8 EMA.

[james_gsx]

Looks like a descending triangle is forming on the 30min chart. The $109 region is holding well. The daily looks bearish if we break that support level, yet the 30 min looks like we could get a nice bounce if we close above $110. Time will tell of course.

[trader273]

CL had an uneventful day. Not much movement and unable to take out yesterday's low. Heating oil and Nat Gas took out the lows, so I would suspect that monday the low will be taken out on CL. till then...

[james_gsx]

Natty gas looks very bullish to me on the weekly. Once this resistance is broken I think it will explode to the upside. The volume accumulation is a bullish sign. I just need a way to play this move, since I don't know of any ETF's that underly NG. I could always figure out how to do a strategy on the options underlying NG I guess.





Anyways here are the other energy markets. I think we will see a breakout very soon in all three.

[trader273]

	Quote:	james_gsx
	Natty gas looks very bullish to me on the weekly.

[james_gsx]

The way the candles show, we should see a pullback to the trend line for the current ascending triangle. I would not buy anything until a close above resistance, obviously. We have not got that yet, so I sit on my hands waiting for the breakout. If the breakout never happens then it never happens, but if it does I will be ready.

The bullishness is based on the weekly chart that goes back to early 2006, so it is a longer term play. The trade will not fire off until a successful close above resistance with strong volume (to show real money behind the move). The biggest reason I believe the breakout could occur and we could see a substantial move in price is due to the volume on the weekly. If one were to look back at previous attempts at our current resistance they would notice a lack of volume, it's the exact opposite here.

[trader273]

	Quote:	james_gsx
	The trade will not fire off until a successful close above resistance with strong volume (to show real money behind the move).

So you are just looking for a close over resistance, not a candle pattern to confirm, correct? If that is the case, then I can see your bullishness. I personally wouldn't just buy if/when it closes over resistance, I would wait for a retest of that resistance, which would then be support, and candle pattern. If you look back, you can see some head fakes.

[james_gsx]

You bring up a very good point, and it might be worth waiting for the pullback. From what I've seen with the energy markets that happens quite frequently, and the initial breakout is usually very volatile - and would most likely result in getting a bad entry. If I wait for the pullback it result in a more favorable risk/reward.