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oiletftrader
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I trade oil futures etfs. I use a trading system based on basic technical analysis to achieve gains. I don't rehash news, I don't predict the unpredictable, I don't pretend to be a genius, I try to educate and share observations with other traders, and I do say when and why I make a trade.
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oil etf trader
  • 2X OIL ETFS- A NEW YEAR AND EXCITED FOR NEW TRADING - JAN 3/11 0 comments
    Jan 3, 2012 6:07 PM | about stocks: USO, UCO, OLO

    Well 2012 is here and a new trading year begins. The main objective for this year is the same as last which was to buy during major overbought or oversold signals. It proved successful last year and I intend to use it again this year but to also keep an eye on divergences for additional signalling but the oversold and overbought signals from oscillators are still the most important for this volatile ETF. 

      This year I will also be keeping a closer eye on shorter term moving averages to aid in a few slightly riskier trading decisions based on moving average cross overs. They do seem to work well on this ETF as I had back tested them extensively and will discuss these more as time goes on.  This year I am also introducing an oscillator I have been thinking about for some time now and will keep an eye on it throughout the year. The Variance Oscillator is intended to signal overbought and oversold signals as well as distinguish sideways or trending movement. 

       Overall the emphasis will strongly remain on oscillator signals. They have been good to us in 2011 although my exiting should be better this year since in 2011 I had a tendency to exit early at times. Better to exit early than stay in too long is still a strong belief of mine but with the experience of 2011 I have looked at some techniques such as fibonacci spans and other exit strategies that I will discuss when needed. Right now we are still in sideways mode even though markets got a bit excited today. We will still remain with patience, watch, and wait for entries. It's new year and they will arrive eventually. Good luck and let's take at look at today's chart.

     

    Ken

     

    HOU Volume  1.76M
    HOU  Avg 1 month 2.06M
    HOU Avg 3 month  2.85M
      Very low volume today as small contingent of bulls participate in trade . Note how the 3 month average has now moved below 3M level. Indicates no strong interest in either direction.
     


    Oscillators:
    MFI and Ult Osc still sideways even though Ult Osc veers toward overbought. Full Sto is overbought for immediate term traders to look for a HOD entry but overall these oscillators are not overbought enough for me to trade.

    I will be watching this chart also in the new year with the shorter term MAs. 

    The Variance Oscillator

    For the new year I am unveiling my new variance oscillator. I will watch it but won't act on it for some time until I am convinced it is an asset to trading. The objective is to indicate overbought and oversold areas which will be when the chart has scores of about 3 or greater (overbought) or -3 or less (oversold). Another objective of this chart is to indicate sideways movements ( horizontal movement along the zero line) or trends ( movements away from the zero line) . As it is now we are it is  quite stuck to the zero line indicating sideways movement. 

     


    Market Indicators:
    NYMO   and      10% INDEX both stay north  past midlines today with NYMO up at 47.01.
    VIX: 22.97   Interesting to watch.
     
     

     
     
     
     
     
     
     
     

     
     
     


    Conclusion:
    Just when it seems oil will head south, bubbles of support appear to keep it pressed up against the $100 dollar area. This area is psychological resistance as chatter about the effect on the economy starts when prices get here or even higher however the stubborness at these prices can now allow for the possibility that the market is increasingly less intimidated by $100 + prices but Eurozone issues will linger into 2012 but headline fatigue is making the more bullish less influenced by the multitude of Eurozone news.  Headlines about healthy global economic data and hopes the U.S. Federal Reserve would further ease monetary policy  created a minor stir today along with the latest Iran headlines. 
     Prices seem wedged in a narrow range and will need a major headline kick to get things moving again.We can just watch and wait for the next move.  As always Oscillators are the key for this volatile ETF and they are not giving us definitive oversold or overbought signals for a while now. 

     Note :UCO (US) and LOIL (UK)  move almost exactly with HOU.to.(Canada)

     If you have any comments, questions, or suggestions please leave a comment. Thank you for reading today.

    Ken

    If you are reading on iPhone you can add a shortcut icon to your homescreen by going to the bottom of your screen, tap the icon of the arrow in a box pointing right, and select  the "add to home screen" option for quick app-like access.

    Buy/Sell:                                                        
    2011 Q2                                                       2012
    April 11/11 Buy  HOD $5.18                             No trades 
    April 12/11 Sell  HOD $5.76       +11.20%
     May 3/11  Buy   HOD $5.12
     May 4/11  Sell   HOD $5.40      +5.47%
     May 9/11   Buy   HOU $7.69
    May 10/11 Sell   HOU $8.25      +7.28%

    2011 Q3
    Aug 5/11 Buy HOU $5.61
    Sep 23/11 Buy HOU $4.37

    2011 Q4
    Oct 19/11 Sell HOU $5.30         +6.21%

     Total cumulative percentage gross gain 2011:  33.63%
     Note the net percentage will be less due to trading fees etc

    Risk disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results.This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.
    Themes: : Canada USO UCO LOIL Horizons BetaPro NYMEX Crude Oil Bull Plus HOU.to oil price Stocks: USO, UCO, OLO
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