Crude Oil… Shake and Bake. Third time’s the charm.

It isn’t often that I don’t see the “Sunday Futures Open”, but I was busy yesterday, and had dinner, and I couldn’t check them until a few hours in. But I checked them at dinner, of course, on the phone. — That being said, once I checked them, I was pretty aggressive to take advantage of thin overnight trade (that I didn’t or couldn’t agree with).

First off, I was pleased to see the USD sell off over the weekend — I know we “will” raise rates, but from last weeks price action and headlines — It didn’t seem like we would be making any move at all come September. *As of today’s settlement, we are now in September, the august month end portfolio “adjustments” have taken place, and it is a fresh start. – I was able to make a few good trades betting on some risk currencies, and still have a lot of opportunity to trade the EUR/USD, I think this is a must trade again as the consistent up and down opportunity is there.

This morning I was incredibly swamped, I legitimately did not get to “trade” or look at an actual computer until 1pm. I was doing a lot of “phone” monitoring and (trading if needed). Sometimes it pays to be busy — I mean if you have been reading my blogs, you know I have been bullish on commodities, but specifically in my Crude Oil position… This has ultimately rallied almost 30% since Wednesday night of last week. As always, I was focused on the future, as in “where we are going next”, and this trade is working out, much more than anticipated. Granted, we had come off extremely aggressively from our 100+ a barrel highs, but clearly I’m not the only one who sees the bigger picture now. As I noted before this “rally” stemmed from the huge bid in distillates (RBOB HO), the products have had incredible strength and follow through.

Last night Crude Oil was down well over $1 all night, “as many as you wanted”, this was the perfect opportunity for me to not only cover the calls I sold at eod Friday, but cover some puts as well… Then I went to sleep. Everyone else was puking/selling, I saw it as the “shake and bake” set up to hopefully our third BIG rally/squeeze. This morning, CL was a bit lower still, it had traded above 45, but came back down around U.S. market open… Then like Thursday, like Friday, *The trend is your friend — and we are up almost another $4 today alone! Luckily, I was busy for almost the entire session, I wasn’t able to “ruin or mess this trade up”, I constantly adjust the risk in this position, but again during the US NYMEX session, Crude did all the work. — Since I have positioned for the “future”, I didn’t need to play Monday Morning QB, — The best thing about the entire CL position, is I have paid ALOT on hedges and kept risk tight with rolling up puts and as I said earlier selling calls at time against long futures, as well as rolling between months and outrights/options.

The only way to be a profitable trader — is to trade — I have to take risk, or I can’t make (or lose) any money. I am focused more now than ever, on making money, if I stay active and TRADE, this is very possible, and then sometimes, you get a little lucky, and even without trading, you make more $. — “Sometimes the best trade, is no trade at all”.

I’m sick of talking about Crude Oil to be honest, (as I am sure most people are, since they were all short clearly ha)… I love the trade, and I think there is a lot more to do around it, but I am still cautiously optimistic. (And as I have this cautious optimism, I can’t remember the last time we rallied like this, let alone 3 days in a row.

I was distracted with ES EOM options expiration today (once I could trade), and I still think Gold GC is the next “market” to make a significant move (or maybe I am positioned for that).

That being said, it may sound like I know something, but, I know nothing. — And: Knowing that I know nothing has given me back the ability to trade. For now.

Let’s try again next week. Have a GREAT weekend! – Happy Trading.

-Bret Rosenthal