Today everyone was able to discover how powerful is a junior bull. Today we broke above the 200 EMA, so I will make the call the new bull market has begun.
Fundamentals are not working anymore. Only sentiment, chart pattern, indicators are useful. I mentioned many times that the news , or what powers saying are useless. 2 weeks ago Saudis were talking about not cutting the production. And today they just agreed with the Russians.
The news are your enemies.We the small guys will be the last informed about anything. Our friend is the chart we just have to read the small signs what smartmoney is leaving there for us. That is the reason when fundamentalists and Marketwatch will be talking about that oil is rallying everybody should get on board I will be selling and walking to the sidelines.
I post again this 2009 chart because it's very similar to today's chart. We dont have the pennant this time it was just a simple DCL 5 days ago . But I want you to see what happened in the 2nd daily cycle 7 years ago.The tiny pullbacks in the 2nd daily cycle were just good for adding the position. You cannot short this junior bull market. You just can't predict when the pullback starts. And if you can't pick the exact top - and I'm telling you 9 from 10 you can't- it will be a looser trade. The only thing you can predict where the pullback is turning: 10 EMA or 20 EMA. (In 2009 the 10 EMA was , and I think now in 2016 again the 10 EMA will be.)
If you are in stay in. Don't sell after 1 dollar of rally. Because you will not be able to get in again. Then you get nervous because you left behind at the station. An then comes the revenge short which will destroy your account.
Today they hit price back to the 200 EMA at the close. Lot of people will try to short again as a turn down from the 200 EMA. But it won't. Use the 10 EMA pullback tomorrow (around 39-40$) to enter or adding to the position.
In 2009 2nd daily cycle rally lasted for 1.5 Months. We still have minimum 4 weeks of rally , maybe 6.
Let me close this post by a famous quote of Jesse Livermore.
"And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level, which should show the greatest profit. And their experience invariably matched mine -- that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance. The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains they cannot sit tight. Old Turkey was dead right in doing and saying what he did. He had not only the courage of his convictions but the intelligent patience to sit tight."
Sit tight and let your winners run - this is the mission of the next 4 weeks.
Comments
nexuz
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and again thanks for your work. guess a lot of traders (including me) are too nervous when you reached a level where your trade increased five times or smth like that. its the hardest lesson to learn in my opinion.
for the record: even after the real bad API Data Oil (+6.2m barrel) WTI only dropped back to the 200 EMA. So just as you told me "they will buy every dip". So maybe this afternoon we got another opportunity to enter when the EIA Data will be released.
BrokeButBold
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Posted it 2 months ago, no views, XD
potomacapitol
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how many multi-week, >$10 rallies failed in the prior 09 crude cycle?
chartwatchers
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The low rig count will make shortages soon.
BrokeButBold
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Posted it 2 months ago, no views, XD
AL_G2
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awesome quote in that post "The market does not
beat them. They beat themselves"
TomPower
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Well I was long at $70 a barrel and I'm out now. Some other guru from a big Bank decided to tell me that it's going back to test those lows again.
suburra
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Congrats bro... Great job...i like ur way
Beebags
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Thanks for posting this, and great Livermore quote too!
for the record: even after the real bad API Data Oil (+6.2m barrel) WTI only dropped back to the 200 EMA. So just as you told me "they will buy every dip". So maybe this afternoon we got another opportunity to enter when the EIA Data will be released.