WTI reached our upside target yesterday, resurrecting inflation fears and nudging interest rates higher.

continued for members…

RB came within .02 of the .618 target at 2.8143……helping the 10Y to highs not seen since November 2023. We’ll take a look at the bigger picture for oil and gas after this morning’s roundup.

Futures are moderately higher following two reliable algo signals: VIX’s breakout was brought back under control and EURUSD rallied back above its SMA200.

The green channel is still broken down, with the white channel as a possible substitute that would allow a gentler rise into November. Note that VIX is back below its SMA200…...while EURUSD is back above its.USDJPY is still standing by for any needed rescue missions.And, DXY is about to backtest its SMA200. Back to oil and gas…

Both fell from the post Ukraine invasion highs in very well formed channels. After making a double (triple?) bottom in early 2023, CL tried to recover (the rising red channel), but only rebounded less than 50% of its losses. It subsequently broke down below the rising purple channel bottom and backtested it yesterday at about 70.7% of its drop If it pushes back into the rising purple channel, then it has plenty of upside potential to the white .886 at 91.92, the white 1.272 at 102.46 and the white 1.618 at 111.91. Needless to say, the rising tensions in the Middle East could see things get completely out of control – dashing hopes for lower inflation.

RB is in a similar situation, though its rising purple channel never broke down. It made a lower low in December, and if it breaks above horizontal resistance at 2.95ish has potential from 3.42 all the way up to 4.55. Again, the repercussions for inflation are potentially huge.

This is a developing situation, so anyone trading oil/gas should remain glued to their favorite news channel and trading site.