Trading short-term (day to day or intraday) is a difficult proposition in any environment. You need reliable tools (software), focus, and, believe it or not, you have to know what you are doing technically. And to become good at short-term trading, you have to trade, which means you have to take your lumps on the way to success, which, it appears, the writer of the question below is doing.
Has the trend changed for crude oil from long to short? I seem to be going the opposite way most times.
Trading commodities these days is a tricky business. Fundamentals matter sometimes and other times, well …
LONDON (AFP) – World oil prices fell on Thursday as traders took profits from a rally the day before, analysts said.
Now, the above comes from today’s news, but when you put it up against the news from yesterday (see below), you can see more clearly the frustration of the crude-oil trader who sent in the question.
Crude markets had jumped on Wednesday thanks to a weaker dollar and a lower-than-expected rise in US crude inventories.
And when you then compare that to the news that came out on Tuesday, well, you can then understand how difficult it is to spot short-term directional movement in crude oil these days.
It has been a volatile week for crude futures, with them plunging on Tuesday in reaction to China’s surprise interest rate hike.
To answer the question directly, though, I would have to say the trend is long term, and the direction is up. This is where the fundamentals come into play, as seen in the excerpt below.
CHICAGO (Reuters) – Caterpillar Inc (CAT.N) reported stronger-than-expected quarterly earnings on Thursday and raised its full-year forecast, citing especially strong demand for its construction and mining equipment in the developing world …, including China, India and Indonesia, [which] accounted for about half the growth in machinery sales volume with increased infrastructure construction fueling demand for building equipment …
The need for oil will not go away for some time, and considering the above, and the fact that the U.S. and Europe will begin economic recoveries in earnest sooner rather than later, you should consider this a long trade, unless of course, you want to improve your skills as a short-term trader in a volatile market.
Trade in the day; invest in your life …
