We’ve been bearish on oil for quite a while, shorting it at 75.57 on October 3, 2018 after Jamal Khashoggi was dismembered and at each of the 3 subsequent peaks since then: just before the JCPOA breakup, the Abqaiq attack and the Aramco IPO — which should have been a peak, but resulted in a headfake “breakout” climaxing in the Al Asad attack.
Last night, CL dipped to within 0.41 and RB within 0.187 of our next downside targets. As members know, these are critical support levels. A breakdown would be devastating to oil and gas and present stocks with very strong headwinds.Futures, now at 3260, are headed straight for our next downside target at 3200.Yes, the coronavirus is potentially a very big deal. But, this decline in oil and gas was baked into the markets over a year ago and is a strong endorsement for our inflation model.
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