Oil’s Tipping Point….the Election………..with update
With the start of the real election process yesterday it is obvious that the Republicans biggest problem is the economy and the economies biggest problem has become oil.Â
From the very beginning of the Bush Presidency, the secret Cheney oil meetings,Â the Iraq war,Â all together worked a very effective oil strategyÂ that made a lot of Texans and Saudi’s rich beyond their wildest dreams.Â They have reached their monetary goal and now they have to unwind the deal to appease the public and try to get another Republican elected.
This means an all out effort, push the dollar higher, hold the Israel-Iran war plans under wraps, stop filling the strategic reserve and blame it all onÂ commodity / hedge fund investors by changing the investment rules for them.Â They have to do it now.Â Friday’s scream upward in oil prices was probably just a curtain call to unload positions before the oil crash.Â This is a bit of conjecture, but probably more true than not.
As to todays trading.Â
Â The 1370 area on the S&P, which was the lower side of the previous trading range 1370 to 1420, is now the upside resistance level that has to be reckoned with at the moment.Â This leaves the current narrow trading area as 1345 to 1370 with hard support at 1320 for a new 1320 to 1370 overall range.Â Oil will be key.Â Lower oil will initially put pressure on the S&P through lower oil stocks, but the l30 dayÂ stock market move should be back up to test 1395 area on lower oilÂ .
7:01 AM CDT
10:45 CDT Update
133 on the August Crude oil Futures is the level to watch.Â That is the level on Friday where we went to a neutral position….if this level is taken out….back to short positions in oil or oil etf’s.