TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.
OPTIONS PLAY: WHAT IMPACT WILL AIR STRIKES ON IRAQ HAVE ON CRUDE OIL PRICES?
WHERE DO YOU SEE RESISTANCE IN SEPTEMBER CRUDE $98.32/BARREL OR $100.19/BARREL?
Fundamentally, the fact that the President OK’ed air strikes on Iraq could actually be bearish or supportive to CL prices. That and the fact that the Russian invasion of Ukraine is simmering down or at least it’s not front page news that trader’s are reading for now seems to be keeping prices in check.
The Subtle Trap of Trading: http://www.zaner.com/offers/?page=10&ap=mmckinne
MY TECHNICAL OPINION
On the chart below I have placed my favorite technical indicators. They are the 9 day Simple Moving Average (SMA, red line), the 20 day Simple Moving Average (SMA, green line), and the 50 day Simple Moving Average (SMA, blue line). I have also added the Bollinger Bands (BB’s, yellow lines) and Candlesticks (red and green bars), each bar represents one day of trading on these daily charts.
To qualify for a “SUPER-TREND” down and a full blown sell signal here is what I need. I need the 9 day SMA (red line) to move down and under the 20 day SMA (green line) as both indicators point lower and the market trades below the 9 day SMA. I have that on the chart below.
MOVING AVERAGE FORMULAS AND STRATEGY GUIDE:
Technically, in looking at my favorite and my most reliable technical indicators, I see September crude oil in what I have coined as a “SUPER-TREND” down. In order to achieve a “SUPER-TREND” down here is what I have to see. First I have to see a cross of the 9 day SMA (red line) down and under the 20 day SMA ( green line). The cross occurred on about July 8. The second thing I need is for both of the indicators to point on lower angles as the 9 is below the 20 and that took place a couple of days later when the 20 caught up on July 11 and started to point lower. Then finally, the market itself must trade below the 9 day SMA and then the 9 becomes the first area of resistance in a “SUPER-TREND” down market. If you look at the chart below you will see that all of these qualifiers are in place.
However, Friday’s trading session had trader’s pushing crude oil all the way up to that first area of resistance in my opinion at around $98.32/barrel where the 9 day SMA is at. The second area of resistance according to my indicators is at the 20 day SMA around $100.19/barrel. The good news is that from a technical stand point the 9 day held beautifully as the market bounced off of the indicator and fell lower to close at $97.65/barrel for the week.
You can also see that 50 day SMA ( blue line ) is starting to curl down to and in my view it won’t belong before the top line of the BB’s (light blue shaded area ) starts to point down also. As for the bottom line of the BB’s, it is pointing lower on a very sharp angle and if there was any support on this chart that would be it.
I figured this out by placing my favorite indicators on the charts and studying them which I found at: http://www.markethead.com/2.0/free_trial.asp?ap=mmckinne , which is a web application that we have developed for our clients called MARKETHEAD where I get about 85% of all my research from. That means I get both technical and fundamental research from this web app and I am a veteran series 3 Broker of 15 years. So if I’m using it then maybe my readers should check it out. Yes?
Super Trend Simple Moving Average Report:
Potential plays that could be considered here and now would to buy bear put spreads with a call as a hedge in case the market rallies drastically against us. Also I would consider selling deep out of the money calls. Remember, when you sell naked options you have unlimited risk and should have a “well-funded” account of risk capital.
For exact details on other types of risk, months, expiration dates, strike prices, and number of positions feel free to contact me at 312-277-0115 or email@example.com. In addition, I am by no means “married” to the silver market. I like to make trade recommendations to my clients in the direction of the existing trend whether the market be the precious metals, energies, currencies, financials, softs, grains and more.
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FREE QUOTE- “Success is measured by your discipline and your inner peace.” -Iron Mike Ditka
FUTURES, OPTIONS AND FOREX TRADING IS SPECULATIVE IN NATURE AND INVOLVES SUBSTANTIAL RISK OF LOSS. THESE RECOMMENDATIONS ARE A SOLICITATION FOR ENTERING INTO DERIVATIVES TRANSACTIONS. ALL KNOWN NEWS AND EVENTS HAVE ALREADY BEEN FACTORED INTO THE PRICE OF THE UNDERLYING DERIVATIVES DISCUSSED. FROM TIME TO TIME PERSONS AFFILIATED WITH ZANER, OR ITS ASSOCIATED COMPANIES, MAY HAVE POSITIONS IN RECOMMENDED AND OTHER DERIVATIVES.
FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION’S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE’S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT OPTIONS PRICES MAY ONLY MOVE A LITTLE.
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