RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

As of Thursday afternoon, the June 2018 WTI Crude contract was trading at $68.23 as the bull market shrugged off a number of potentially bearish factors throughout the week including:

  • builds as opposed to expected draws in both the API and EIA inventories
  • a strong dollar
  • outside markets concerned with multiyear highs in rates.

Of course, the high rates relate to inflation which helps the bull side as well as:

  • concerns about the Iran deal on the horizon
  • near record or possibly record Commitment of Trader longs
  • all time historical export levels and tight supplies compared to the 5-year average.

There is no recent price action above these levels, so it is interesting to note the lack of technical resistance from a charting standpoint as well as the hint of lower highs and lower lows over the past few days, in addition to ranges which have been smaller than a number of days prior.

While it is easy to see the bull market continuing with momentum, COT managed money and a lack of technical resistance, traders may also remember the recent record longs and the possibility of the trade becoming crowded and stops being hit amid long liquidation.

Traders may consider options strategies with June options having 21 days until expiration.

Crude Oil Jun ’18 Daily Chart

Crude Oil Jun '18 Daily Chart

Michael O'Donnell

Mike started his career in the markets on the floor of the Chicago Board of Trade as a trade checker for a local market maker in the Dow Futures pit. This led to interning with an independent introducing broker and going on to work with a number of market participants including: speculating clients, hedge clients, introducing brokers, futures commission merchants, commodity trading advisors, proprietary traders, trading educators, system creators, and a number of international financial market participants.