WTI spent May 2020 through Feb 2022 in a fairly well-defined channel (below, in white) as it recovered from its pandemic lows. It broke out on Mar 1, however, topping 100 and taking only 5 sessions to reach our 130 target which wasn’t schedule to happen until December.Since then, it’s seen a series of fits and starts, holding an internal trend line and flirting with reentering the white channel. It’s flirting no more. Against the backdrop of a gas tax holiday and significant demand destruction, it has dropped through the channel top and the 100-day moving average.

continued for members…The bigger picture:

Gas is also taking it on the chin.This is a real quandary for the algos. Should they turn bearish due to the longstanding positive correlation with oil or cheer the potential drop in inflation?  So far, they’re off about 1.5%.  More significant, 10Y yields are off 4.5% to 3.16%.

Currencies are fairly stable, all things considered. Remember, the next leg down should be nasty – but might still be some time off as the bottom isn’t due till July 19.

GLTA