Oil is now in a bear market, falling 10% in 7 days. A bank contagion could be upon us, the Fed is now in U.S. Dollar money printing mode. Setting up $ swaps with the major central banks. Rates may pause in May 2023. Inflation is still at multi decade highs.

Chart 1


Chart 2


Chart 3


Oil is now in freefall, falling, since January 2023, through all its price supports of 90, 78, 72 and 69.  Particularly the last price support of 69 please refer to Chart 1.    Chart 2, although slightly messy, with price, study and trade positions.  Shows the meteoric rise of oil with inflation and now the collapse of the oil price, which seems to be pricing in a greater bank contagion.   The current oil price at 64, has fallen 10%  in less than 7 days.  Now in a bear market and oversold.

Probably on news that three major Central Banks: Federal Reserve, Bank of Japan and the European Central Bank will begin dollar swaps in lieu of tightening liquidity conditions.  Which is sending a message to the broader market that a contagion of banks is probably already beginning.  Thus, making USD's unattractive as a safe haven, hence the Bitcoin rally, while more bailouts maybe on the cards.

The Fed, according to the FedWatch prediction tool is now showing a just under 50% that they will increase rates by 0.25% this week.

Chart 3 shows the 6% inflation in the U.S., running at multi decade highs.

Comments