Summer is over.. But the gas tank is still full.

This trade Idea is a transfer of our open short from prior published idea. Summer is over so it's time to track our action on our daily chart. The old charts remain available but get too busy with notes. Our transferred short was entered over the last two months at an average of $47.10.

Its clear that this summers consumption has done little to reduce available oil. The US is importing oil at record amounts... Not to use, but to store. Storage and pipeline services are booming. There are massive physical hedges going on oil, this requires longterm capital. Not something to store oil in just out behind the barn. This storage needs utilization for years... Not just a few quarters. Our target still remains WTI @ 38 by the end of the year.

We have now seen oil leave the only active up channel.. I had not expected it to drop outside of the latest micro channel (after drop to 45.5). I do not anticipate a newer, steeper micro channel to form... but will watch for it.
More likely it will increase in volatility until the (no change) opec meeting is over on 27th. Until then lots of opportunities for day traders as long as they go with Trend & Fundamentals.

Out swing-trade timeline lets us go outside .. But we will add to our shorts on spikes when they warrant. For now we are holding short.

Comment:

I updated this the current down channel to include yesterday's bottom, and China's conformation overnight. I have no call for today, yet.. But would not be surprised to see a day of consolidation.

Trade active:

Quick 10day summary

Trade active:

$45 has always been a rough zone for oil. Last year we stalled here for 60 days before breaking down in November to it's low. As long as we stay between here and 43'ish until the end of the month, it continue its drop to 38 by end of year. Iran & Russia can freeze, pump, or whatever. As of today SA still controls oils price.

No Monday rant (cuz it's Tues)on how so many people look to oil with western eyes..

We remain short on oil. As long as oil renaissance stays in a trading range that keeps SA on sidelines we expect the decline to continue. Be Safe.

Comment:

We are returning to updating this trade & idea, as the last one which was a 1 week short closed with a 21% gain. Was a great week, and hindsight tells me we did it right, even if we left a few % on the table. Anyway.. that short was opened when this short & oil revisited 47. That trade is closed and it was 100% no change in this strategy.

Target.. 38 by end of year. (Looks like late October)

So to catchup, the below are a few of the working charts I'm using to work this trade.

Comment:

Last one.. Daily with pivot &Fib, more as a overlay.. Testing pivots... Looks very useful to the trade.

Trade active:

As we approach the OPEC meeting, we will be setting up for our post meeting drop. I would not trade here unless it was at some crazy level, like 47 again. In that case I would add to shorts... maybe? But no longs...

Here is the storm report updated... it could get crazy in ranges.

Trade active:

Ok.. here we go. If you have been following this trade, you know it was key that we got through the next POEC meeting... why read above. But we must get to the meeting within the "no change production' price range... 44 to 46.

It's spooky how this has tracked.. but it's important we close above 44 today, 45 would be better... the point is we do not want a change in production...

Of course we remain safe. Be safe... as we have been saying.. and saying... expect big swings.

Comment:

Sorry.. typo. We remain Short. Be safe. ;)

Trade active:

Well we didn't plan on trading today, but we miss the last two times it hit this level and have been wanting another bite above 46 . We were a little sloppy entering the trade, but we have added a big short at 46.10.

We see little chance of oil breaking through these 1, 2, & 3 year trend lines. Oil continues to fail at any significant up channel, and i don't see current inventories or production changing that.... Be safe.

We are now max short!

Comment:

Ok, this is the day/price we have been calling for sense we published the Storm charts above. We are getting failed attemps to break into last weeks macro up channel.. If it gets too bullish just before OPEC meeting ends and EIA is bullish, itcould go to 46 or 46.25. But that would be sold off quickly. If we were not max short, i would add shorts above 46. If it get there... My guess is 45 at close of EU markets.. Below that at close of US.

Expect big swings... Be safe.