CL WTI Crude Oil - Getting In Sync With The Market MakersIn late July I made a call that oil's actual target in the imminent term is not $100+, but actually a 3 or a 4-handle.
Oil - A New Long Leg Down Soon Begins
I believe that this long term analysis is still correct. However, price action has shown that the target was finally the daily gap at $85 and was achieved last week.
Thus far in some 7 weeks of trading, oil has only gained $9.
I likewise believe that before Natural Gas goes on its next bull run, it's going to violently abuse the longs with a raid under $1.8
NatGas - No Moon Until Doom
But with current price action, we may get a false breakout over $3.1 before that can happen.
A pump in energy and metals in September would be congruent with the thesis that equities are going to have a very red September as a setup into a Q4 that takes out the highs, which I outline here on the Nasdaq ES Futures:
Nasdaq Futures - Are You Prepared For Red September?
But the problem for retail traders is everyone is "practical" and believes that we're going straight up from where we are. It's a new bull market, some guy who works for some big bank and is tasked with engineering liquidity for high net worth clients and funds, told social and establishment media.
Equity bulls need to give their head a shake, though. And so do energy bulls.
With the U.S. being net short hundreds of millions of barrels from the Strategic Petroleum Reserve and the Fed reiterating that interest rates simply are not going to be cut until there's an international economic crash, the "long" trade only exists insofar as riding the wave that is intended to kill long term funds who are net short.
If the scheme really is to rally like it's a new paradigm into Q4 and create a Bump and Run and then blow the world economy away in 2024 ahead of the next U.S. election, which Joe Biden will win because Donald Trump will die in prison, then there are significant risks.
It's just like Burning Man where they decided to do a ritual sacrifice to the Azov cult in Ukraine and were met with a flood and rainbows and now are trapped in 6 inches of their own urine and feces and alkaline mud.
What I mean by the above is that the best laid plans of mice and men always go awry, and this should be obvious to anyone who understands the situation in China with even a modicum of sobriety.
Unfortunately, the people who understand China with a modicum of sobriety are almost nobody.
Xi Jinping is an idiot who is still holding onto the Chinese Communist Party, the most murderous and worthless regime in all of human history.
While Xi has never participated in the persecution of Falun Dafa's 100 million practitioners, which was started July 20, 1999 by former Chairman Jiang Zemin, and has even been killing the Jiang Faction as his real target in the Anti-Corruption Campaign, Xi is still the head of the CCP.
When the CCP falls, Xi will fall with it and be impugned as responsible for all of the Party's sins in all of history.
And this means that in the process of the CCP falling, Xi may show a glint of intelligence and wisdom and overthrow the Party himself, Gorbachev style, using the persecution as a weapon to protect the real China from being taken over by the International Rules Based Order that uses Taiwan as a proxy.
What all of this means for energy and equities and really everything else is significant gap downs are ahead in the markets, and are likely to come at prices that are high but not that high.
This is because if significant problems in China emerge and go viral on social media that Party West's propaganda machine are unable to suppress, it will disrupt the plan, and all of those long positions that are set to sell at high prices will turn around and start market dumping.
This means you'll wake up one morning and see that SPY and QQQ are down 12% on market open, and this time, unlike COVID, you aren't seeing daily reversals for mitigation.
Everyone will just be open selling to get into USD cash to run for their lives.
Nobody will be around to maintain the bots, and every market will look like a cryptocurrency memecoin.
So here's the trade on oil.
We may see an immediate reversal at $85, where we are now.
But I think the real target is $95, which will take out that effective daily bar double top printed in November of last year.
That will draw in all the $100 call moonboys, since energy bulls are even more irrational than goldbugs.
And they'll expire worthless as we head into the $40s to end the year while Apple prints $220 and Tesla prints $420 and NVDIA prints $480 (lolAIbulls).
So if you want a trade heading into September, maybe we get a retrace to $82 on oil.
Consider going long with a stop under the $77.60~ low. Sell at $95.
Look for big dumps and go short on the retrace and hold into February for a $30 candle.
Then get long for January '25 printing $150+.
