WHERE IS YOUR CHEAP OIL GOD NOW???

oil

WTI played out exactly as predicted, without as much of a pull back as I was hoping for though. I can see the CNBC guys crying themselves to sleep. The front page of the site is completely devoid of articles about oil. I know it’s beating a dead horse, but there is no limit to the satisfaction I get from mocking that farce of a “news” and “analysis” network.

Now with $58 resistance broken, the sky is the limit… or at least $67 (for now). The icing on the cake is that this break came on a down day for the market, again proving that this oil price action is NOT a currency trade. Back at the gas pump though, my enthusiasm withers and dies.

Just another day

Dollar down, oil up. It’s not a currency trade. It’s not a conspiracy theory. The Iran deal has had no meaningful effect (in fact it’s done the opposite of what the pundits called for). It’s simple trading pressure and herd mentality. Smart money continues to price manipulate and slaughter the dumb money. The CNBC boys are so confused right now. Their “oil glut” is a bust. Their website is now completely devoid of anything with the word “glut” in it and limitless numbers of articles/op-eds calling for $20/barrel oil. Those are now replaced by articles talking about oil’s impending rise to the moon and how to get on board. Meanwhile, those of us that bought the bottom because we knew the fundamentals were hyped and oil was grossly under-priced are now sitting pretty.

oil

We are at a bit of a critical point here though. Breaking above what had become a reasonably established down-trend line is great and it led to exactly the type of price runway one would expect, but it has run us straight into major resistance rather quickly and possibly without much steam left. I’m not sure it needs to break the $53 resistance today, but certainly tomorrow or at the very least before it heads any lower than $51.50ish. I would really like to see a close above $53.30. If it heads back down before breaking that barrier, I think $48 will be the net to catch it, but that would likely shift my outlook a bit.