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WTI Crude - An End to the Price War?Market has high expectations for OPEC+++ The stand-out event today is undoubtedly the OPEC+++ meeting, where producers will attempt to find agreement on output that addresses the collapse in demand and crude prices. No one is winning in this environment but, as ever, each are losing to different degrees and have a different ideas on how it should be resolved. I don’t think a grand deal is as nailed on as markets would have us believe but, as ever, common sense should prevail. If a substantial deal is going to get over the line, the US must play a part in some form. It is currently hoping that a market-driven, forced production cut will be enough to convince other producers to cut but I’m not sure that will be enough. Other assurances will be necessary to get Russia on board, which is the biggest risk to a deal. That said, traders have heavily bought into this potential deal, following President Trump's tweet last week. The risk now is not just whether a deal is done but, if it is, will it be enough? I'm not sure a 10 million barrel cut will be enough to hold the gains and even 15 million may just about given the demand destruction we've seen. Should we see above 15 million barrels, it could give the oil price a big boost, with the break of $30 in WTI potentially being the catalyst for another big move higher. The next notable level above here is $35 and if producers want to see higher than this, the cut may have to be closer to 20 million and include the US in some form. Oil has jumped today on reports that Saudi Arabia and Russia have reached a deal on cuts of up to 20 million. The headline sounds good but the small print may not read quite as well. Should this be confirmed without any drawbacks in the fine print, I'd expect oil prices to rise more than they have. There's always the risk of "buy the rumour, sell the fact" strategies going into these things which is why the detail and believability is so important. From a technical standpoint, this looks like a market that's bottomed and just waiting to pounce above $30, but for that we need confirmation. A break above $30 says traders are satisfied with the cuts, at which point we may be able to look upwards for the first time in a while.
OANDA:WTICOUSD
by OANDA
Equity Markets Test 38.2 FibAn update on the US equity markets. In my previous post, I talked about how these next few weeks will be very important. They will determine the future of our world and civilization for the next 6-18 months. I spoke about how on the weekly chart, we have yet to make a swing. We could be seeing that this upcoming week, or the next. The S&P did test the 38.2 fib zone. A rejection at the 38.2 fib zone is important because it signifies a strong trend. In this case that trend is of course a down trend. Price did begin to sell off near the fib zone BUT I must be clear that this alone does not constitute a lower high swing. In order to confirm a lower high swing, we need a new lower low, or a break and close below 2179. It is also prudent to point out that we did also close slightly below the trend line going back from the bottoms of 2009. We saw a battle here with the weekly candle attempting to close above. The way to play swings is very simple: 1) Either enter now front running the eventual break of the lower low. Your risk to reward ratio will be much higher, however the probability of further down side is skewed. 2) Await the weekly candle break and close below 2179 confirming the lower high swing. You have a much better probability of further downside, although your risk vs reward may not be the greatest...but of course this can be managed by how you place your stop. Sure, we may just range here for the next few weeks. Maybe even test the previous lows and see no break and close. We will wait and see. On the fundamental side, we have seen the virus relief bill pass the house and signed into law by President Trump. You now have both the monetary side (from the Fed and other central banks) and the fiscal side combination implemented to keep markets propped up. If this fails...and we continue lower... we could very well be in the confidence crisis that I have been warning about. We will have seen a confidence crisis in governments and in central banks. The final one would be a confidence crisis in the fiat money/currency. Lot of people are focused on the equity markets, but I think the bigger moves, and the moves with more ramifications for the world going forward, will be in the currency markets. Nations and central banks are already killing their currencies as I have said they would. Everyone is trying to weaken their currencies to inflate them. To inflate assets and keep things propped. With more debt being pushed into the system, interest rates will have to be at 0 or lower, and currencies will have to be weak. I have spoken about the US Dollar being strong due to this scenario. The Japanese Yen will also do well. However, the US Dollar getting stronger will exacerbate the worlds problems and make things much much worse. There will be a time when the world rallies together to attempt to force the US to kill their strong dollar. We will see a plaza accord like scenario where the strong US Dollar was devalued by 40%. Crazy times folks, but my followers have had time to prepare as we know what was coming. Human history is cycles of hard money and soft/fiat money, and we seem to be near the end of this one. Expect some sort of digital currency to be implemented in order to keep this system alive...but it will be a harsh world with big government...and pretty much run by government and large corporations as they continue to kill small and medium sized businesses in order to make them debt slaves.
OANDA:SPX500USD
by Uncharted-FX