WTI Crude Oil / CL1 - Accumulation Before Global Conflict
Updated
A lot of fundamentals say that oil should be going up. A lot of Twitteratti and furus say that oil should be going up. Yet, it's not. Oil hasn't been bullish since literally June.
The only reason sentiment is still confusedly bullish like this is because WTI isn't (yet) trading like bonds.
People say that OPEC+ cutting production was some kind of battle with Washington and that the Biden Administration are doing some green energy nonsense saboteuring the country by selling off the Strategic Petroleum Reserve (SPR), because Joe Biden is senile.
That's not what's happening. Are you high? The United States is going to endanger its energy reserves while it's in a war with Russia? Don't be fooled by appearances. You need to start exercising critical thinking.
In my view, what has transpired is pretty simple:
1. The Biden Administration said they would refill the SPR at $80
2. When WTI fell to $76, instead of refilling it, they sold more of the SPR
3. They keep selling more of the SPR on this bounce at $80 and 90
4. The average price the SPR was filled at, the last time I looked, was $60
So why did OPEC+ cut production? Because they're smart money and they realized the United States is short on oil.
The U.S. and its vassals (including Canada) are by far the largest producers of oil in the world. It's their market, especially while Russia is out of the picture, and whoever makes the market sets the price.
So OPEC+ understands that oil is going down and cuts production accordingly. When the Biden Administration refills the SPR, that's the bottom, WTI will bounce hard, and OPEC will increase production again.
This is a lot of words to tell you that oil is going to make new lows, not new highs. This call that I made at the beginning of September is still definitely in play.
WTI Crude / CL - An Intervention: Saving Blind Bulls
There are some really important factors to look at in the longer timeframe charts. Consider that we're almost all the way through October and yet WTI, while it's in a bearish market shift, has not made a monthly low:
This is even more obvious on the Weekly, where a gap is revealed:
This ~$80 January gap range has now been traded extensively but has not produced the requisite re-continuation of a bull run needed, which means that lower prices are on the way.
The reason is, $120 was not the top. A big number like $180 or $220 is incoming, probably in 2023, but before then comes manipulation and accumulation, frankly speaking, probably in the $50 range.
Whether bulls want to hear that or not or want to believe that or not, that's how it goes. Not very many people believed Natural Gas was going to go from $10 to $4.9 either, but it did.
Natural Gas / NG - It's Officially a Bear. Now, Hold My Beer
The big wild card right now is actually not the conflict between the Russian Federation and NATO/Washington via Ukraine as a proxy. Even less is it whether the Federal Reserve keeps clowning around with interest rates.
Xi Jinping was just crowned leader of the notorious Chinese Communist Party for an unprecedented third term and has consolidated the Politburo with only his own people. But more concerningly, the man who should be fulfilling his historic role to collapse the CCP from within a la Gorbachev instead was quoted by ABC as having made communism and the deteriorating CCP "absolutely central to China's development and future."
This amounts to an abject disaster in Xi Jinping's life, a disaster for the Chinese people, and a disaster for the human race. If man won't do something about the problem of the Chinese Communist Party and its campaign of organ harvesting Falun Gong, then Heaven will.
The CCP may or may not attack Taiwan. That's a major wildcard in this call. Personally, I don't think the Party has enough stability while being sacked by Wuhan Pneumonia and hit by economic problems to really dare do it.
Yet, the more imminent a possible attack on Taiwan is, or the more imminent a major escalation with Russia is, the more violently the US oil market makers will dump WTI/Brent to where they want it to be so they can accumulate and refill the SPR.
How you want to trade it and what you want to do is up to you. But I believe we see a number like $89 on WTI this week and I intend to go long on bear ETFs with a target under $50 imminent by January.
Oil is something that is going to make a violent and impressive new high, but those cowboys are not going to let early money and dumb money come along for the ride particularly easily.
Be careful. Humanity has officially entered the most dangerous moment, and at a period where we're already in the proverbial "Triple Overtime."
What you believe can happen and what is actually happening, in reality, are often two different things.
The only reason sentiment is still confusedly bullish like this is because WTI isn't (yet) trading like bonds.
People say that OPEC+ cutting production was some kind of battle with Washington and that the Biden Administration are doing some green energy nonsense saboteuring the country by selling off the Strategic Petroleum Reserve (SPR), because Joe Biden is senile.
That's not what's happening. Are you high? The United States is going to endanger its energy reserves while it's in a war with Russia? Don't be fooled by appearances. You need to start exercising critical thinking.
In my view, what has transpired is pretty simple:
1. The Biden Administration said they would refill the SPR at $80
2. When WTI fell to $76, instead of refilling it, they sold more of the SPR
3. They keep selling more of the SPR on this bounce at $80 and 90
4. The average price the SPR was filled at, the last time I looked, was $60
So why did OPEC+ cut production? Because they're smart money and they realized the United States is short on oil.
The U.S. and its vassals (including Canada) are by far the largest producers of oil in the world. It's their market, especially while Russia is out of the picture, and whoever makes the market sets the price.
So OPEC+ understands that oil is going down and cuts production accordingly. When the Biden Administration refills the SPR, that's the bottom, WTI will bounce hard, and OPEC will increase production again.
This is a lot of words to tell you that oil is going to make new lows, not new highs. This call that I made at the beginning of September is still definitely in play.
WTI Crude / CL - An Intervention: Saving Blind Bulls
There are some really important factors to look at in the longer timeframe charts. Consider that we're almost all the way through October and yet WTI, while it's in a bearish market shift, has not made a monthly low:
This is even more obvious on the Weekly, where a gap is revealed:
This ~$80 January gap range has now been traded extensively but has not produced the requisite re-continuation of a bull run needed, which means that lower prices are on the way.
The reason is, $120 was not the top. A big number like $180 or $220 is incoming, probably in 2023, but before then comes manipulation and accumulation, frankly speaking, probably in the $50 range.
Whether bulls want to hear that or not or want to believe that or not, that's how it goes. Not very many people believed Natural Gas was going to go from $10 to $4.9 either, but it did.
Natural Gas / NG - It's Officially a Bear. Now, Hold My Beer
The big wild card right now is actually not the conflict between the Russian Federation and NATO/Washington via Ukraine as a proxy. Even less is it whether the Federal Reserve keeps clowning around with interest rates.
Xi Jinping was just crowned leader of the notorious Chinese Communist Party for an unprecedented third term and has consolidated the Politburo with only his own people. But more concerningly, the man who should be fulfilling his historic role to collapse the CCP from within a la Gorbachev instead was quoted by ABC as having made communism and the deteriorating CCP "absolutely central to China's development and future."
This amounts to an abject disaster in Xi Jinping's life, a disaster for the Chinese people, and a disaster for the human race. If man won't do something about the problem of the Chinese Communist Party and its campaign of organ harvesting Falun Gong, then Heaven will.
The CCP may or may not attack Taiwan. That's a major wildcard in this call. Personally, I don't think the Party has enough stability while being sacked by Wuhan Pneumonia and hit by economic problems to really dare do it.
Yet, the more imminent a possible attack on Taiwan is, or the more imminent a major escalation with Russia is, the more violently the US oil market makers will dump WTI/Brent to where they want it to be so they can accumulate and refill the SPR.
How you want to trade it and what you want to do is up to you. But I believe we see a number like $89 on WTI this week and I intend to go long on bear ETFs with a target under $50 imminent by January.
Oil is something that is going to make a violent and impressive new high, but those cowboys are not going to let early money and dumb money come along for the ride particularly easily.
Be careful. Humanity has officially entered the most dangerous moment, and at a period where we're already in the proverbial "Triple Overtime."
What you believe can happen and what is actually happening, in reality, are often two different things.
Note
Oil to $88. Frankly speaking, if you think this is the time it returns to $100+ you should be long.If not, we're close enough to the best spot for a new descent downwards.
Note
Notably, oil swept the Oct.14 high If you're bullish on oil and think this is enough evidence to go long for $180 then you should certainly be long.
Personally, I think the intention is to gun below the lows. Stuff like
XOM just made an all time high while oil and NG isn't even bullish, and there's a reason for that, a reason that isn't pleasant for bulls.Note
XOM Exxon Mobily on yearly bars has a fat double bottom at $30.Considering oil has been bearish since June and NG lost 50% this month, making an all time high is really rather curious, and arguably not the good kind of curious.
Note
I took 2/3rds of my trade off with a run under range equilibrium @ $85.30Heading into November for a new candle print probably will see $88 again, but anything higher than that on a sustained basis may really mean the bull is back.
Note
Since oil swept the Oct. 4 high and has shown an unwillingness to trade lower and take out any downside pivots, instead bouncing vigorously at equilibrium, I now believe the new target is actually $91-92.I really do not believe oil is going to moon into the end of 2022. This should be a spot to get short.
I also expect tomorrow's FOMC rate drama may have a dramatic spike followed by a dramatic reversal in many equities and commodities.
Note
Oil with this price action makes me think that maybe it's going to reverse here, since it's purged over the previous double top and also made of itself the previous September double top as resistance.This would be the most bearish continuation.
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Note
Biden Admin finished selling the "last batch" of the SPR today, according to a Reuters wire report. Price has been elevated because the MM has been selling.Now that they're done selling, see how fast oil dumps.
Bottom is in when the SPR is refilled and not a moment before
Note
I was right about moving the short box. What I'm not sure about at the moment is if oil is going to take out the $95.Problem is, it could do so and still not count as a bull reversal. But, we're almost there.
The SPR needs to be refilled on the cheap to satisfy the US Communist Party's desires.
Note
Turns out that second box from the Nov. 1 update was right.Well, assuming that I'm right at all about oil not actually being bullish. Otherwise it's just going to moon.
Note
I gander at this point the $93 double top will serve as long term resistance.Blue Wall Democrat midterms is the catalyst oil, and soon to be natural gas, markets needed to dump.
Note
I can tell from the price action in oil companies like Exxon and Oxy that they're setting up to make a new ATH. And it also seems the equities market really will do the 14,000 Nasdaq thing.Oil will print $100 again before it corrects.
$96 is just total range equilibrium, and it hasn't seen that since September while printing an even newer double top.
Note
Oil was full of so many head fakes and took so long to start correcting that I'll admit it really threw me off. Looks like 60s and probably a return to the trendline are legit in order.
Note
This call also worked out quite well. I haven't updated it in a while, but if oil runs these 4H tops then it's going to hit $85. Whether it does or doesn't, I really believe a 5-handle has to happen and the Biden Admin has to actually refill the SPR before oil goes up again.
Should happen at a faster rate than people expect. The regime needs 110/GAL gas in the non-California US by June.
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