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Last weekend, one of the predictions I made was:
<
Sept Heating Oil
Why on earth would this market go higher? No major Summer
storms to hinder production means lower prices.
Historically the suppliers run tight inventory when
supply appears to be abundant. so......
SELL Opens below 57.00 Protective stops above 57.00
Take profits near 53.75
The only thing that bothers me about this trade is that
many people seem to be of the same opinion. Still, I will
take the trade if 57.00 isn't immediately broken. >
Well, on Monday I sold, and for 3/4 of the day everything
was peachy. I had a profit, and I was sitting at break even
and...... GEURILLAS!! GEURILLAS!!! BUYBUYBUYBUYBUYBUY
I was stopped out so quickly, I didn't even have a chance
to feel bad.
So, with the market sitting two points higher, and the
whole world wanting to buy Heating Oil, what was my
opinion of market direction? UNCHANGED. This little story
will show you why:
Here in the small Florida town of Zephyrhills we have
your typical Floridian wildlife; spiders big as catcher's
mitts. Not as numerous as in the movie Arachniphobia, but
almost.
Outside my trading office window, a small phone-book
sized spider had taken up residence. I could have
squashed him, but the spiders tend to eat the REALLY
bad bugs, so I let him be.
Each day, as the sun was going down, and my trading day
was coming to an end, my 8 legged friend, safe from the
heat of the day, would wander out onto his web. It was
amazing to watch him work. A total model of efficiency;
no wasted movement; a place for every strand, and every
strand in its place.
Watching him hunt was an analagous trading lesson I won't
forget. Did he run all over the place looking for a bug to
club on the head and devour? Nope. He just..... sat there.
His web was cast, and he KNEW the edibles would come.
In no time, a B-52 sized cricket, long in the legs and
short on the brains, was hoplessly (pun intended)tangled in the web. The
spider looked at him fondly and......SMILED.
Call it Literal license if you want, but I think I know
a smile when I see one. I'll let your own imagination
serve as the grisly creator of the neat packaging and
consumption that followed.
On August 4th 1997, Heating Oil rose to the stars. Geurillas
were behind every bush. Rumors of plant shutdowns were all
over the news. But, as a trader, remember that the providers
of information may also serve as unwitting catalysts for
the clever sowers of disinformation.
Most traders now wanted to BUY Heating Oil contracts and
Heating Oil options at ANY price.
Me?....... I just thought
THE SPIDERS ARE SMILING.
[8/4 SOLD on Open 56.70 Stopped out 57.30 BUT the Spider
is smiling so.......
8/6 SOLD 57.60 breakout of previous day's Low. Currently
short at 55.45.Will exit during the night or on the Open.
TRADE 1 $272 Loss per contract after commissions
TRADE 2 $883 profit per contract after commissions ]
Walt Downs
CIS Trading
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