OPEC: Will They or Won’t They?

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OPEC+ is expected to increase production by another 400,000 bpd in today’s meeting, another dagger in the heart of the stubborn oil/gas rally. Of course, at this juncture, CL can backtest its SMA200 without even making a lower low. So, perhaps a pullback will finally be allowed.

Given how important rising oil/gas prices have been to equity performance, stocks might just have a hard time digesting a significant pullback.

continued for members…

Meanwhile, our correction watch continues…

…with the next lower fan line offering a nice intersection with the SMA10 at 4486.50ish. Will VIX cooperate? Its SMA10 finally plunged back below its SMA20 today and the very visible white channel bottom would need to hold. CL potentially has much further to fall, but we’ve been saying that for quite some time. At some point, the YoY comps won’t be as alarming, and CPI won’t be as great a consideration.

Note that there was a high in late August 2020 (the yellow arrow) and subsequent decline which wrapped on Nov 2 – suggesting that this October should follow suit. Keep an eye on the SMA200. Remember, CL’s LT chart is plenty bearish…

…and its RSI chart is dangerously close to bearish. RB looks a little weaker on its face, with the SMA200 almost 10% below current levels. It is also more impactful to short-term fluctuations in CPI.The currency front is also troublesome for stocks. USDJPY appears to be barely hanging on.Although DXY’s rising red TL has broken down, its yellow TL has held. Today is pivotal, as it faces a potential 10/20 cross. EURUSD is the key, of course, and it has been suggesting a breakout. Note that it also faces a potential 10/20 cross.Silver is also at a crossroads, with its own 10/20 cross on deck.

And, GC remains perched atop its SMA200. Ditto for BTC.The bond “market” offers little insight, as ZN is back inside both rising and falling channels. It will have to choose one or the other by the end of this week. Last, we’ve kept an eye on NKD as a sort of guide to central banker sentiment. After experiencing a death cross on Aug 19, it has pushed through its SMA50 and is backtesting its SMA200. Its SMA10 is very close to reaching its SMA20. A pullback here would be tough on the algos, whereas a breakout would have them cheering.