End Of The Year Review

First and foremost, I've decided to keep this blog up and running after shutting it down briefly. The reason for doing so was a variety of reasons including compliance procedures, etc. Anyway, I will be providing updates to this site from time-to-time based on what I'm seeing in the markets. I'll also be discussing timely trading best practices and other related topics. 

The year in review.

It was a wild year for the energy markets. Crude Oil and the underlying products have been absolutely crushed. There are a variety of reasons for this including oversupply, the continued increase in the value of the US dollar among other concerns. But as it stands today which is the last trading day of the year, we have the following:

Year's High: 107.68

Year's Low: 52.44
Year's Close: 53.27

Year's Range: 55.24

Year-Over-Year Range Change: 28.61

Year-Over-Year Price Change: -45.15

Year End Volume: 65,384,268

Change in Year-Over-Year Volume: +3,540,528

Some other interesting stats for the year are the following:

• Price has closed way outside of the year's developing value as well is the previous year's value.
• Price closed outside of the current and previous quarter's value.
• Price closed outside of the current and previous month's value.
• Price closed at roughly the week's VWAP. 
• This year's range exceeded the last five years' range and is the second largest range I have available in my data. The largest being the crash in 2008.
• Price has closed right on the long-term trend line that has been supportive since 1999, 2002 and 2009. 
• Price is very close to reaching my proprietary long-term volatility band support level of 51.35. The other extreme of this volatility level was resistance back in 2011. So, essentially moving from one extreme to the other. 

Looking ahead at the new year.

By looking at the stats I've listed here, we can see that Crude Oil and its related products are still looking very bearish. I won't postulate the how's and why's of what may occur but I can say that we could see continued downside price discovery while looking for a level buyers feel comfortable with buying this market en masse. Obviously, the supply/production levels need to pair with the existing demand but there's also the continuance of a stronger US dollar. At the time of this post, the USD is taking out the highs from 2013, 2010, 2009 and very close to 2006 and 2005's highs. This has negative pricing pressure on commodities. 

One scenario I can see happening is that price finally gets to a level where buyers are interested and wee see a price range compression for the year. Then again, it could be a case like in 2007 where the market went too far too fast and we saw a huge reversal. Definitely something to keep in mind. 

With that said, I hope you all have a happy new year and I'll be back soon with further market analysis.

**Warning: Redistribution or copying of this content is strictly prohibited without our expressed written consent. This is not investment/trading advice. Trading in futures and options involves substantial risk. You may lose more than your initial investment.**