FuturesPros Daily Analysis February 23, 2010

[futurespros]

Crude Oil Visual Trading Update


General Notes:
They say that volumes, for all assets in the financial markets, dropped like
a stone yesterday, when Tiger woods revealed everything about his private
life. Well, it tells you how the financial world can be influenced these
days...

On a more serious note: Everybody is waiting for Bernanke to speak, as if,
he will reveal to us its real intentions. The FED is a reactive body, and it
can be seen clearly by a chart of the 3 month T-Bill compared to the FED
moves. You will notice that the FED is always the following one, and the
market is the leading entity.

So, what does it tell us? That maybe, and I say maybe because they are so
many pundits out there, that think that the FED is such a
brain-storming-all-solving entity, the market will move short term rates
higher, and force the hand of the central bankers.
Maybe it will be in the Euro Land, before the US and Japan, and maybe the
whole sovereign debt problem, combined with the need to raise so much
capital, for closing the deficit gaps, will eventually creating a chain of
events, that will take the control from the FED and its colleagues.

And maybe the moves in the EURO, are just what is needed before the Spanish,
Greeks, Irish bonds issuances? and not only a technical rebound from an
oversold situation? We really don't know. Just a thought.

Current Trading Plan:

Position: OUT
Last (18-02-2010) Closed position @ 78.50 (-$1.7)
Long: --
Short: Below 79.00
Exit by Stop Loss: --

Technical Indicators Notes:

Last time we said: "Our theory of the head and shoulders is approaching its
decisive moment. There is no denying that the momentum in this commodity is
very string, and we think that we can attribute this to seasonality. We got
this entire move while storage grew, and while the weather got better!
Getting overbought all over and the angle of ascent got steeper. It reminds
us of the typical upswing price fans (in a smaller scale) of the later
stages of a blow off."

We set the entry level to reflect our view about the H&S pattern. RSI is
reversing after OIL reached its resistance. The whole complex looks a bit
stretched, and so we moved our trigger a bit. If we are right, it is a
really long way to the point OIL will test our assumption (69 area).

Charts Legend:

In Price Window:

Simple Moving Average (20): Green
Bollinger Bands (20,2): Violet
Support & Resistance price areas: Pink and Light Green areas
Trend lines and Channel Boundaries: Blue
Elliott Waves Counts: Black and Blue numbers

In Indicators Part:
RSI (10): Blue, STOC(5,3,3): Green, ATR(5): Blue
MACD (12,26,9): Blue, Signal: Red, Histogram: Green
Indicator trend lines and effects: Magenta

Signals:

Long: Above the Green line
Short: Below the Red line
Exit position: On crossing the Cyan line
SL in case of triggered level: Dashed Cyan Line

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analysis written by Moshe
Shalom for .

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Disclaimer
Trading Futures and Options on Futures and Cash Forex transactions 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. You may lose all or
more of your initial investment. Opinions, market data, and recommendations
are subject to change at any time.
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