Hello, again my friends! I was looking forward to writing this report for you all, this Saturday I am also writing a premium article for my subscribers and if you are not subscribe here! This is the last week with the promo prices. So let’s drop the talking and go to what matters!
CRUDE OIL, LIGHT SWEET – BEARISH BIAS
We all saw last week an amazing rip in oil prices caused by a supposed Iran drone attack, I would like to invite you for a reflection as how well prepared you are for trading using this event, how many time we have seen apocalyptic events on markets to some hours later become just on an “overreaction” of traders and now they say it was a problem with algorithms? And How many times have you profited on these events? If the answer is none, you should start reviewing some stuff and I will give you some light at least at the sweet light sweet crude oil (sorry for the spun). Let’s go!
After the news of the drone attack you all should expect oil gaping on opening, this is consensus, but you also should think that oil moves the World and prices suddenly going to the moon can only bring chaos and because of this any kind of measures will be taken to stabilize prices, even lie about that no disrupt in supply would happen even if your main oil refinery just got bombed. Ok. so this is the reasoning you should have:
High oil prices will bring chaos to an already fragile World’s economy AND(big and here) Saudi need USA military protection and Trump wants lower oil prices, so prices will go down
So our plan would be to sell OIL! So you open the charts and see that the last supply zone is between 63-66USD and this zone was formed about 04/2019 to 05/2019. With this info in hands, we go to our cot data to check what happened with players positions.
Supply/Demand Zones
Players Positioning at last supply zone
Players positions at the bomb attack
We should look to sellers, why? It’s always more important to see who is going to lose money because these are the players that make the irrational move! Well, we can see that the sellers now have and smaller position then well the supply zone was formed.
Bazinga! Great news for our plan because the big players will also join us in our move to short oil!
Also, note how big is the seller’s power they just had 114323 contracts opened some weeks ago, will come back to this later, but before this is where you should have placed your orders.
Cheap stop loss and high conviction(because of evidence) that trade will go in our favor can make your trade big, make a big bet and consequently big money, you don’t have to trade every single day to make money or to live from trading. Remember what Sun Tzu said :
If you know your enemies and know yourself you will not be imperiled in a hundred battles.
Ok Leo, nice, but what about this week? Well, we just see that sellers capacity for OIL is big! They show they can go up to 115k contracts on the short side and they are just 70k and they increased 5k from last week! The bomb week. This makes me think that we and the big specs have the same rational and the selloff will increase in next weeks
This is the scenario I am expecting
GBPUSD – OUT OF BEARISH ZONE
Remember last week report we said GBPUSD was about to become bullish? I can say right now that GBPUSD is out of the bearish zone and despite the big drop this week(Brexit related and remember what we just talk about oil, be prepared and have a plan) my plan is focused on buy dips on the pound.
BIG DROP OUT OF SUPPLY ZONE
NET SHORT POSITION DECREASED AGAIN
Stochastics COT SIGNAL – CLOSE POSITIONS
An interesting zone to place orders
GOLD – BEARISH REVERSAL TRIGGERED AGAIN
Some weeks ago I posted an article explaining why gold dropped after long weeks of rising, the exactly same signal triggered again, just after revisiting a supply zone! Also, I would like to point out that this time of the year is demand for Gold in India increase ahead of their festivals and it’s not the case this time, as you can see here.
GOLD COT POSITIONS
What happened to GOLD after Indian Festival in the past and where I took a SHORT POSITION
I posted a lot of more info to post about gold and why I think the drop will continue in the premium article I told before.
I have a wonderful NZDUSD COT Signal and it will be posted in will be our “Trade of The Week” will be available on Sunday, stay tuned. The views from last week remain the same as nothing new has really happened. EURUSD remains to sell on rallies and now with and extra a member of ECB council and with a strong hawk view quits in protest over loose monetary policy, Ms. Lautenschläger, you can check the article here.
The Supply/Demand indicator used in the charts is available in my store for cTrader, MetaTrader, and TradingView.
That’s it my friends! I hope you all can make some money out of this info and if have doubts or want to hear about or currency/commodity leave a reply!
Best regards
Leo Hermoso
Hi Leo, very good report, you include a lot of information to support your analysis, just second day of the week and Gold, Oil in line with your expectation, GBPUSD still in the zone… good job man. Thanks for sharing.
You’re welcome my friend!