WTI Crude - Step 1) $88 --> Step 2) $58.
Updated
When it comes to oil, it was supposed to do the super moon back to $120 thing when Xi Jinping and his Chinese Communist Party finally stopped welding people in their homes and going full blown technocratic social credit while humans tried to "fight" Wuhan Pneumonia (COVID-19), but for one reason or another, the pump never got off the ground.
Probably because a whole lot more than the 87,468 people Xi and his CCP claim to have died from the disease are actually dead, and so demand is just legit in the toilet and industry can't get going, because China has big time problems stemming from its 23-year-long persecution of Falun Gong, which includes the unprecedented crime of live organ harvesting (they've done it to Uyghurs too), and the Party's outright fetish for human rights, freedom of speech, and freedom of belief abuses.
Being bullish on "China" is a totally separate thing from being bullish on "the Chinese Communist Party." One is extremely wise, while the other is totally moronic.
Totalitarian regimes never last a long time, and the Party has already had more than a century. Clinging to Marxism is like clinging to the Titanic when it's 5/6ths of the way under the water.
When it comes to WTI oil, both the fundamentals and the price action are strange. This is a commodity that you don't want to be very bearish on after it traded at literally $0 during 2020's western COVID pseudopandemic theatre hysterics. Yet, while oil also isn't liking to go down, it isn't liking to go up.
In October, I had a pretty accurate call that WTI would plink the $70 range.
WTI Crude Oil / CL1 - Accumulation Before Global Conflict
And a pretty good call in September too when everyone was convinced oil could never trade low again
WTI Crude / CL - An Intervention: Saving Blind Bulls
But the ultimate endgame of the calls, $50, has not manifested. It seems as if perhaps these prices won't manifest, and it's almost time for the uppy.
There's some problems with this narrative, however.
The key factor is that the United States and its vassal states (including Canada) are the world's largest producers of oil, by far. Russia and OPEC combined are really the only challengers, but the US has the advantage in that you need the USD to buy oil, and so ultimately the Biden Administration is the legit market maker.
The problem with the bull thesis is that the SPR was filled at $29.70 over the years while Biden and friends sold half of it off in the 80s and 90s. This inherently tells you not that they're trying to destroy themselves, but just that they're short on crude oil.
The news in December, right after oil wicked the $70 mark, was that the Biden Admin was buying it all back.
But then in January, the tune changed as the US Government said "The bids didn't come in low enough, so we haven't bought yet." Media says they want to buy around $70.
And this brings us to our very strange price action in WTI.
Crude has a gap at $85-86 and combines with a Dec. 1 pivot around $83, while recent trading activity was a triple top of successive lows at $82~.
Then we dumped to $72, but did not make a new low, and have since bounced back to $80.
All of this combines to give us no reason to believe that a hybrid short-killer/breakout trader-crusher play is not about to be made around the $88 level.
This gives us 10% to the upside, which is really quite nice to work with when WTI trades 1,000 barrel lots and you also have access to the leveraged ETFs like UCO and SCO.
But the bottom is not in. Look at the weekly candles.
Oil just hasn't retested the long-term trendline from late 2021, and in combination with the US Government having been unwilling to refill the SPR at $75+, should give you all the reason in the world to be extra cautious with going long as more than a scalp.
Under $60 **combining** with media chatter that Democrats are refilling the SPR is where you want to go long. And if you do it right, you'll get the bottom for what will quickly turn into $180.
2023 is going to be a wild year starting in July. If humanity makes it to 2024, it will be even more of a ride.
TL;DR: Long to $88 --> Short to $55, and start treating Bloomberg's Javier Blass like Jim Cramer. Trade against the narrative. Be patient. It's too early for the next moon, yet $120 in '22 was no top.
This should combine with natural gas being on the cusp of pumping:
Natural Gas? More Like Natural Go. 4-Handle Coming
Be careful, and trade safe.
Probably because a whole lot more than the 87,468 people Xi and his CCP claim to have died from the disease are actually dead, and so demand is just legit in the toilet and industry can't get going, because China has big time problems stemming from its 23-year-long persecution of Falun Gong, which includes the unprecedented crime of live organ harvesting (they've done it to Uyghurs too), and the Party's outright fetish for human rights, freedom of speech, and freedom of belief abuses.
Being bullish on "China" is a totally separate thing from being bullish on "the Chinese Communist Party." One is extremely wise, while the other is totally moronic.
Totalitarian regimes never last a long time, and the Party has already had more than a century. Clinging to Marxism is like clinging to the Titanic when it's 5/6ths of the way under the water.
When it comes to WTI oil, both the fundamentals and the price action are strange. This is a commodity that you don't want to be very bearish on after it traded at literally $0 during 2020's western COVID pseudopandemic theatre hysterics. Yet, while oil also isn't liking to go down, it isn't liking to go up.
In October, I had a pretty accurate call that WTI would plink the $70 range.
WTI Crude Oil / CL1 - Accumulation Before Global Conflict
And a pretty good call in September too when everyone was convinced oil could never trade low again
WTI Crude / CL - An Intervention: Saving Blind Bulls
But the ultimate endgame of the calls, $50, has not manifested. It seems as if perhaps these prices won't manifest, and it's almost time for the uppy.
There's some problems with this narrative, however.
The key factor is that the United States and its vassal states (including Canada) are the world's largest producers of oil, by far. Russia and OPEC combined are really the only challengers, but the US has the advantage in that you need the USD to buy oil, and so ultimately the Biden Administration is the legit market maker.
The problem with the bull thesis is that the SPR was filled at $29.70 over the years while Biden and friends sold half of it off in the 80s and 90s. This inherently tells you not that they're trying to destroy themselves, but just that they're short on crude oil.
The news in December, right after oil wicked the $70 mark, was that the Biden Admin was buying it all back.
But then in January, the tune changed as the US Government said "The bids didn't come in low enough, so we haven't bought yet." Media says they want to buy around $70.
And this brings us to our very strange price action in WTI.
Crude has a gap at $85-86 and combines with a Dec. 1 pivot around $83, while recent trading activity was a triple top of successive lows at $82~.
Then we dumped to $72, but did not make a new low, and have since bounced back to $80.
All of this combines to give us no reason to believe that a hybrid short-killer/breakout trader-crusher play is not about to be made around the $88 level.
This gives us 10% to the upside, which is really quite nice to work with when WTI trades 1,000 barrel lots and you also have access to the leveraged ETFs like UCO and SCO.
But the bottom is not in. Look at the weekly candles.
Oil just hasn't retested the long-term trendline from late 2021, and in combination with the US Government having been unwilling to refill the SPR at $75+, should give you all the reason in the world to be extra cautious with going long as more than a scalp.
Under $60 **combining** with media chatter that Democrats are refilling the SPR is where you want to go long. And if you do it right, you'll get the bottom for what will quickly turn into $180.
2023 is going to be a wild year starting in July. If humanity makes it to 2024, it will be even more of a ride.
TL;DR: Long to $88 --> Short to $55, and start treating Bloomberg's Javier Blass like Jim Cramer. Trade against the narrative. Be patient. It's too early for the next moon, yet $120 in '22 was no top.
This should combine with natural gas being on the cusp of pumping:
Natural Gas? More Like Natural Go. 4-Handle Coming
Be careful, and trade safe.
Note
Bloomberg reports Biden Admin selling another 6% of the SPR, just in case anyone wondered if they were still short:bloomberg.com/news/articles/2023-02-13/us-to-sell-26-million-more-barrels-from-strategic-crude-reserve?sref=6uww027M
I still believe a run --> $86-88 before any real move down is the most likely result.
Note
It was really tempting to go long here today, but this price action feels like a short-term trap:Weekly crude data is tomorrow and I gander the setup for a run over $85 is to blow out this fake double bottom and probably the $76 range.
On the other hand, it's not so bad to get in 3% early.
Note
Oh. Noes!"Mah support has been breeched!"
Technical analysis is pretty reliable, but not if you trade it like you see in books and signal groups.
Note
Well, I have to say for oil if she doesn't bounce here and raid $88 then it's not going to raid $88 and the pattern was something else.Note
Personally, I feel the algo drawing away from $73 is bullish confirmation that $85+ is coming.Really does look like energy and maybe even metals are going to go while tech and stocks dump.
Note
Looks like oil is finally going to head higher starting in the beginning of March.That really was a lot of screwing around.
Note
Oil finally breaking out of $78.Everything is coming to fruition so far.
Note
Look for WTI @ $75 for the run over $83 imo.It's a nice 10%. Don't want to see $72 though.
Note
Oil MMs are really annoying, but I believe the bottom will hold because they just have to smash through the trendline and wreck shorts before it's time for a 4-handle on WTI.Note
Next week is do-or-die for this WTI trade.Either it rebounds and goes to dumpster the flat tops over $83 or the intention is to just be a hopeless mess until it's time for $180 oil.
BTFD works until it doesn't, like everything else.
Note
Oil is showing some signs that the run under $70 was really just a sellside liquidity purge.This is important to note for a few reasons because it means
1. MMs will really take out the trendline/flat tops @ $80+
2. A reversal over the trendline means lower prices for longer. Think a 3 or a 4 handle with reversals heading into winter.
3. Gasoline and diesel prices come from crack spreads and are set by refineries, not the price of oil, so low oil doesn't mean anything for lower CPI inflation, but the illusion does give the propaganda machine an angle to deceive equities bulls and bears with.
Note
Oil is really looking as if it's confirming the anticipated run to $88.If so, it should be bearish until the end of the year afterwards.
Note
This call has been quite accurate, except for the dump below the lows. An important thing in trading is that you continually re-evaluate your theory as price unfolds, with a total willingness, and a total reluctance, to throw the entire thing out the window.First trading day of April and we've got a potential "shooting star" over the trendline.
Yet we're below the relatively equal highs and the target is $85 to $89.
In my opinion, one of the best trades of 2023 may be short on oil (specifically, long on bear oil ETFs) after this flirts with $90 and fails.
But first, it has to do $85, and then we have to see evidence of failure.
Right now, I think if you go short you're going to get hurt, because this gap isn't going to get filled until it's doom time.
Note
85 incomingAs a trader, you should maintain reservations if the narrative shifts to "Oil 2 $100!!!!!!!!"
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