Unfortunately, to my knowledge as well, the only way to approximate Crude Oil is to use the West Texas continuous contract which does not equate to the NYMEX futures exactly. I wish we could see futures charts in StockCharts – it would make analysis easier.

I can’t go into too much detail as I trade oil through ETFs but in general, futures contracts have an expiration date and must be rolled into the next month as that contract expires – most expire once per month (toward the middle of the month). Try searching for the terms “Backwardation” and “Contango” for some interesting reads.

I would probably start with the NYMEX website and then compare to the CME or CBOT (which merged) for specific information on contact specs, margin requirements, and hopefully have all the questions answered there.

Otherwise I’ll open the discussion up to traders who actively trade crude futures.

I had been following $Wtic, but it doesn’t match up with the Nymex crude prices I see. What is the difference between the two? Nymex light crude is $34, and wtic is in the 40’s.

I’ve also been reading about contracts expiring, front month contracts, and so forth. I don’t understand any of that yet I’ve been unable to find any websites that explain it. I’ve done countless google searches and had no luck so if anyone has any tips on where beginners can learn more about the oil futures market, please advise. Thanks!

Oh, by the way, really like the article. I’ve been watching the $CRB and had noticed the higher low that was recently put in. Something to keep an eye on..

That’s a good question. Though odds favor downtrend continuation, eventually the trend will end and it will most likely end in multiple momentum divergences, which we’re seeing now. It’s as if price is building a base for a reversal – reversals don’t just occur on a dime.

If we don’t get a reversal, then we don’t get one but it seems the downtrend is diminishing, though we must assume it will continue until it is officially reversed (with a higher high and higher low).

They’re just set-ups… odds and probabilities. If we do get a reversal, we will stand to gain much more if we put a position on here than we will lose placing a stop beneath the lows of December. Ultimately trading is risk-management and edge analysis – the edge is to the upside whether or not we take out the lows.

But you’re right – one could view higher timeframes and the broader inter-market relationships for additional clues.

A quick question- CRB is clearly in a down trend that on a daily chart would resemble a “trend day” behaviour. In such an environment momentum oscilators give usually false signals (vide: October divergence in CRB). How do you approach these type of set ups? Looking at macro environment? Higher lows on shorter time frames?
Thanks for all your updates!