The energy markets continue to trade back into the low $40 range for front-month WTI Crude Oil before rejecting this price. Today we are seeing a rally back into the highs of last week and September. Since we have traded here before several times then reversed I’m expecting similar price action to occur in the upcoming days ahead. Fundamentally not much has changed in the oil landscape with China still carrying global oil demand. An update on the bearish side sees both OPEC and the IEA make downward global demand revisions to their forecasts this week. Surges across the world in COVID infection rates only strengthen my bearish mindset for crude oil. For these reasons, I want to fade today’s rally and establish a short position. We will be trading the December (Z) contract for additional time and because the volume-leading contract rolls to Z from X at the end of this week. I recommend the following:
SELL GCLZ20 @ 41.30 or @ Market
BUY STOP @ 42.20 ($900 risk per contract)
BUY LIMIT @ 39.50 ($1,800 profit per contract)
OR trade the Mini contract which is 1/2 the exposure per contract – QMZ20
*Risk/reward are calculated before commissions and fees*
15 MIN CL – TAS Navigator Trend Exhausted & TAS Ratio Crossing Over Lower = SELL
DAILY CL – Testing Resistance Level & TAS Ratio Crossing Over Lower = SELL
Jace Jarboe | Futures & Options Broker:
Find More Opportunities in Crude Oil Futures Like This One
This is an example of one specific trade, but navigating today’s markets can be tough for new and experienced traders alike. If you’re actively trading futures and are looking for the insight, education, and empowerment to make better trades, join the Jarboe Trading Journal for the guidance you need. In the meantime, download my free Introduction to Oil and Gas Futures guide to expand your knowledge of the energy futures markets and prepare for the next opportunity.
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
© 2021 StoneX Group Inc. All Rights Reserved