OK, I’m scaling in lightly starting at 2.96 here. I see USO dropped to 2.25 very early this morning, so maybe prices will make it back down there during normal market hours this week.

I think your analysis is about as accurate as one could expect, without having that elusive crystal ball. I see that SPY is closing lower, than when it opened. Correct me if I’m wrong, but it’s been awhile since we’ve seen that. Also, I remember the last dump on SPY occured, after crude took a plunge. Perhaps, tomorrow’s open will vindicate the patient bears. Thanks for the great work, Randy.

because the demand has gone to historic low that producers has to pay people to take inventory otherwise there is no space to store.

Chicago to Phoenix is only $70

I’ll try to touch on crude in the next update but for now, I’m standing aside from that trade, awaiting the next objective entry with a good R/R (most likely on the long side). I made these comments at the end of last week in the trading room & that still sums up my thoughts on crude:

Crude futures are testing the late March/early April multi-year lows but just can’t seem to catch a bid, nor can I make a very strong case to go long (and the risk to short crude this low is too high IMO, especially with the ETN’s like USO & UCO as you can wake up to a 10%+++ gap against your position if crude futures spike overnight).
Funny thing is that the stock market continues to rally as if we’ve 100% turned the corner on Coronavirus yet if that was actually the case, then one could only assume that the crash in demand for crude has ended & therefore, crude should be rallying in anticipation of cars back on the road, planes back in the air, etc…
Either the stock market or energy market is right so I’d suspect that one is going to play catch-up to the other soon (i.e.- crude up or stocks down).
https://rightsideofthechart.com/members/pbathula/activity/141097/#acomment-141117

Starting to warm up to the idea of starting to scale into a long position to profit from the next quick short-covering rally but holding off, for now, to see how the stock market handles these recent divergences & the breakdown on those QQQ & /NQ 60-minute wedges.

Years back, I used to factor volume into my analysis more often. However, over the past decade or more, I noticed that the old school method of using volume to confirm bullish & bearish moves seemed to apply less & less. Not sure if it was the proliferation if HFT (high-frequency trading) although I’m sure that has a lot to do with it.

I still keep volume bars on almost all my charts & do look at it. However, I mainly look for increased volume on breakouts as well as looking for volume spikes that seem to align with both near-term as well as longer-term buying & selling climaxes (i.e.- blow-off tops & capitulatory selling after an extended downtrend or sharp leg down, such as we had on Feb 28th which marked the end of the first leg down & start of the first counter-trend rally before the next leg down came. Note the big volume bar on both QQQ & SPY on that day (I added QQQ as an official long trade that day, in part from the near-term selling climax, then closed it out for a gain a few days later… going back to short after that).

If you can post concrete analysis from any service that navigated the stock market, bonds (corporate & Treasuries), gold, & commodities as well during the recent drop, covering all equity shorts shortly before the bottom & then moving to a net long/bullish position through the bulk of the move off the lows, I will refund your membership fee. Not one or two calls but a link to all trade ideas & analysis over the time spanning since the market top in mid-Feb.
If you can’t, please refrain from posting comments that don’t provide any value to the board. Also, you might want to lower your bar of expectation on both how many trade ideas from this or any service will pan out as well as how quickly swing trades that do pan out (hit their target) do so.

Nothing else to do can’t even gamble on sports right now

It’s hard to grasp. May contracts went $ negative. It’s possible June contracts can go from $22 to negative as well if people don’t start flying soon.

Almost all brokers suck when it comes to the availability of shares to short. Interactive Brokers consistently has the best availability of HTB (hard-to-borrow) shares. With that being said, I do find it odd that any broker wouldn’t have shares of SPY to lend as that is one of, if not THE, most widely held ETF period. As of right now, IB is showing they have over 2M shares of SPY available to short so not sure why most other brokers wouldn’t have plenty as well.

Here’s the AAII Bull/Bear spread plotted on a chart. Keep in mind that I find absolutely no predictive value in sentiment indicators unless there are at extremes (bullish or bearish). Any readings inbetween are essentially useless IMO.

http://schrts.co/KQdJmUmx

In my opinion, God no. I wouldn’t short crude with your money as the R/R is abysmal. The June contract of /CL is trading at $21, as I type. While I’ve read the rumblings about the possibility of producers having to soon pay to have crude taken off their hands, I really doubt crude prices are going much lower unless we get some huge second wave of COVID-19 cases that lead to an even larger shutdown of the economy & crude demand.

I think the risk of being caught in a 10-20%+ sudden short-squeeze far outweighs any profit potential for shorting crude here. I listen to this guy’s explanation of contango in the video but he’s assuming a static demand (no change) in spot prices. Again, it’s about the risk vs. reward & I think the reward potential for shorting crude here does not outweigh the risks. Doesn’t mean it can’t or won’t drop another 30-50%. Also, consider the risk of shorting an ETN like USO (or buying a short ETN) is much larger as you can’t limit your losses as well as futures due to the fact the ETNs don’t trade around the clock.

Patience, grasshopper. Patience.

Nice positive (bullish) divergences finally starting to form on the USO daily chart. However, no buy signals at this time. With today’s drop & the current positive flow of COVID news/cases with more & more talks of re-opening the economy (as long as that lasts) I think a case can be made to start scaling into USO here but again, I can’t make a strong case to go long as crude remains in a downtrend with zero buy signals at this time.

it turned into negative price in later session? would it cause massive shut down on drill? would the risk of defaulting on bonds surge? would this has ripple effect into the broad market and/or financial sector?

would you talk a bit more detail about crude today?

That’s a good point. Randy rarely mentions volume.

Just a problem on your end. Mine’s fine. ToS has been sucking late though. I think I need to add 2 or 3 more brokers because they all have problems sometimes.

election year

anyone knows what happen with ThinkorSwim? the crude quote does not move even with updated month quote

Thank you for your concerns, although I think most of us are quite happy with the service. I am anyway. I’ve learned loads since being here, and I’m sorry you’ve not had the same experience. I’m sure you could easily find a better service elsewhere.

ACOR popping today too