Crude Oil $CL_F : Buy the rumor, sell the news!

A lot of people asking me (surprised) today “Why did Crude Oil sell off?” —

My answer, half jokingly, quoting Gordon Gekko — “Because it was wreck-able!” …What I mean by this is, IMO: it almost seemed like everything was aligned for Crude Oil to continue its climb higher, and everything seeming so perfect meant, – it can’t happen.

This isn’t the first time the market (especially CL) hasn’t done what the majority in the moment anticipated it would or should do… or I guess could do.

First off, why did I think Crude Oil would rally? — well, I have been thinking that if we can exploit the “unlimited Crude Oil supply story”, we could start heading North finally. That being said, anytime we have data or information regarding CL and inventories, I am watching— So we had API come in (Tuesday after close) with another massive drawdown, AND THEN we have EIA come in today with another back to back draw…

So as we were already higher on the week from Monday’s strong rip higher in Crude Oil of about $2 or 4%— the people had certainly bid/bought the rumor ahead of the #’s. But, as we got confirmation that maybe there hasn’t been an abundance of CL as we initially were told — the fact is SOLD.

This is why trading is hard, this is what makes trading so difficult. I am not the only oil bull who saw these massive drawdowns and started salivating at the potential new HOD’s to come — but, as the title and CL closing price show, they never did, the new highs never came.

What I did well while the news went my way, but the market (CL) didn’t — I didn’t fight it, nor did I fight myself.

What I mean by this is: that, I didn’t “bet more”, I didn’t buy more oil, or start taking off my hedges (on the dip back), or panic against the move… I also didn’t mentally stress myself out by trying to “figure out why we went down” or if I should change my sentiment this minute. *For me, its just another trading session, its 1 of 250 potential trading days that this product or my trades could have worked out, but it didn’t, this is why I have tomorrow.

The goal is to make money, but regardless of professional or amateur, in trading, there are going to be many times where it “just doesn’t happen”. Today, on Crude Oil, the trade really “took place” prior to all the “news”, it was “wreck-able”, so it sold off, but — I lived to trade another day.

For reference:

*EIA: US DOE U.S. Crude Oil Inventories (18 Sep) W/W -1925K vs. Exp. -1250K (Prev -2104K)
*API: US API Crude Oil Inventories (Sep 18) W/W -3700K (Prev. -3100K)

—Just wanted to check again, ha. *Still look like draw downs to me!

Let’s try again tomorrow. – Happy Trading.

-Bret Rosenthal