Oil and gas futures tagged our next downside targets this morning. RBOB is now off 12.2% in the last two weeks. CL is off 10.8%. While baffling those who focus on fundamentals and various geopolitical risks, these price moves made perfect sense when viewed through our favored prism: “what do TPTB need them to do?”
That equation, my friends, boils down to a few essential elements: inflation, stock market support, politics and chart patterns. While oil gets all the attention, it’s really gasoline prices which do most of the economic fine tuning.
From Oct 3 [see: VIX Takes the Plunge]:
CL and RB…not only reached overhead resistance by our measure, but must deal with bearish API data, another round of Trump tweeting, and a large build in EIA inventory. I think the time has finally come to revert to short, but with tight stops in case this is a head fake.
This morning, RB is threatening to break below the trend line and channel lines that guided that forecast — which, of course, is all about politics.
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