Last month President Biden made a jaunt to Saudi Arabia to “kiss the ring” and try to get the black gold flowing once again.
We’ve got midterms coming up and it’s not a good look for gas prices to be north of $4 bucks a gallon…
Earlier in the year the Saudi’s didn’t “holla back” when Biden tried to get them on the horn…
A little snub that harkens back to 2020 when candidate Biden vowed to make The Kingdom a “pariah state”.
That led to “The Fistbump Heard ‘Round The World” as now President Biden is trying to walk a tightrope…
Can’t spit in the face of the Crown Prince, but also can’t look too friendly either…
Don’t want to get tut-tutted by the purple-haired “wokes” that make up his base back home after all.
The irony is, a fistbump actually looks a lot chummier than a stale handshake.
But, I digress…
On Wednesday, OPEC upped production… by a tiny, little trickle…
Basically, they’re throwing us crumbs.
It really looks like the Crown Prince is punking the Biden admin with another snub…
But, with an admin that seems hellbent on kneecapping American energy independence…
They’re doing it to themselves.The funny thing is, even though supply is a LOT lower than expected…
And even though that should lead to higher prices…
The exact opposite happened!
Crude finished near the lows of the day and is about to break underneath a massive support level.
Crude Breaking Below Resistance
And it still hasn’t recovered above the swing AVWAP from the June highs…
Bottomline, this doesn’t look like a Bull Market any longer!
Now, don’t get me wrong… I’m still bullish on the fundamentals.
There are way too many structural issues in the oil space to keep prices from collapsing.
But methinks a strong shakeout might be in our immediate future before that.
The “Powers That Be” know that midterms are fast approaching, so there’s a “stick save” attempt underway to tamp down on energy prices.
(Maybe a temporary deal in Ukraine — but you didn’t hear it from me.)
The good news is our Trading Roadmap is lighting the way to two clear downside targets for crude:
Crude Downside Targets
The first is at 81.70.
That is the HVN and prior resistance level from the Fall 2021 highs.
It will be a classic “pullback to breakout” setup where a pivot level is retested from the other side.
If the selling is too strong, then our next downside target will be 71.85.
There are some zones just above that where it could hold, but if we get into the low 70’s…
I’ll be taking a hard look at some Oil and Gas stocks.
If you want to fill your trading account from all the juicy setups that are sure to follow…
