Last week we had a bloodbath on the stock markets and I could have picked any of the major stock indices (DOW, FTSE, DAX. S&P, Nikkei) as the trade of the week.
They all collapsed and many of our traders made more money last week than they had in the previous 6 months.
However, this week I want to look at CRUDE OIL which is not getting much press at all considering what happened on the stock markets last week.
Crude Oil fell by over 10% last week. This was one of the biggest weekly falls in years.
The catalyst for the fall was twofold.
1. A general sell off across the markets for riskier assets (stock markets being one) and oil joined this sell off party.
2. A recent over production of oil globally which is pushing prices down. Only in the last week have the USA produced over 10 million barrels a day.
The price of a commodity like oil is determined by supply and demand. If there is an oversupply we will have less demand which correlates to a fall in the price.
From a technical perspective we can see a break of a major support zone on Wednesday which helped drive the momentum down further.
A very nice SELL trade for those who were tuned into what was happening on the charts and understood the drivers behind the sell-off.
Join our “ Make me A Trader” 6 Part course and shorten your trading Journey.
Click below to find out more:
CM Trading is the Brand name of
Global Capital Markets Trading and BLACKSTONE Marketing SA(PTY)LTD (GCMT SA)
The website is operated by CMT Processing Limited.
HIGH RISK WARNING:
Trading Foreign Exchange (Forex) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.
© Copyright 2015 - CM Trading - All rights reserved