Oil – inflection points for Apr. 20, 2017

Yesterday’s trades

Sell: $53.20
Keyline: $52.50
Buy: $52.15

.Oil was a bloodbath yesterday. The market dropped about $2.00 a barrel, a move worth about $2,000 per contract for traders. It gave back half of the gains made since the March lows in about six hours.

The decline started with the release of the usual Wednesday Department of Energy oil report — which was unexceptional —and continued almost without pause for the rest of the trading session.

The price movement was flat overnight, and the high for the day was within a few cents of Nat’s sell level, although it never quite reached $53.20. Some overnight traders may have missed the entry by a few pennies.

Once the decline started the price moved quickly through her keyline, and her first and second buy levels. It bounced slightly at the end of the day as the victorious shorts covered their positions.

One of the problems with waterfall moves like that is that there is no good entry point unless you are on board from the beginning, and stay on board to the end.

Entering long is suicidal, but the market runs away so quickly it is difficult to find a good short entry either.  The move looks like it should produce big gains, but traders are often disappointed.

Today’s workbook