2022/08/21 (059) Column

The Oil Price Is Made In Vienna This Week!
US Stocks End Week On Sour Note,
While USDX Resumes The Rally,
& Crypto Markets Tumble.


The Oil Price Is Made In Vienna

In addition to Russia’s war of aggression in Ukraine and the state-sponsored green policy in our so-called West, for better or for worse, the current nuclear negotiations with Iran in Vienna are likely to have a more or less decisive influence on the price of oil. And also the fact that the religious right, under the leadership of Benjamin Netanyahu, in Israel, in the fall, want to regain power politically. Can one assume that a deal with Iran will be reached this time, as was the case with Obama? Okay, admittedly China’s faltering economy weighed a bit on oil prices earlier in the week. Which also prompted me to formulate a short trading capability about UKOIL at the start of last week. But let’s not fool ourselves. The left-wing green politics of the EU and/or Iran seem to have more equal interests than most conservative liberals in our West, especially US right-wing Republicans in the USA and Israel, would like. Like Saudi Arabia now. But that’s all a bit too high for me personally (religiously) politically – even as an outspoken familiy member of a conservative roman croatian franciscan catholic family tree. Therefore keep your eyes peeled for the future price development of the oil price, what kind of (new) information we are getting from Vienna. Not only – but inclusive!

As is well known, Iran sent its response to the draft EU treaty to Brussels on Tuesday. Now it is being renegotiated eagerly. If you look at the development of the oil price, then the markets seem to be counting on a rapprochement between Iran and the USA. These hopes are nourished, among other things, by statements by the Secretary General of the oil cartel Opec, Haitham al-Ghais. He stressed that markets could take Iranian oil well. “There are still major doubts as to whether the deal will materialize, but if it materializes it could be the catalyst for further downward movement and perhaps even take the price to levels not seen since before the invasion seen more,” writes Craig Erlam, senior market analyst at Oanda, in his recent Market Commentary. Only if the negotiations end well could more oil and gas hit the market in the near future. That would be good news, especially for Europe, which is known to be desperately looking for alternatives to Russian gas and oil.

It is not often that the international financial markets, especially commodity traders, look to Vienna with a great deal of inquisitiveness for (new) information. But in the last few days and also in the coming days, we should all do this with increasing tension. The nuclear negotiations with Iran are currently taking place in Vienna. And this despite the fact that the current Iranian rulers are still outspokenly supportive of terrorism in the Middle East. And or else Russia did not explicitly object to the violation of international law in the case of an attack on Eastern Ukraine. I don’t know if I’m too naïve as an outspoken friend of Jews, of Israel and of capital – and or are my adversaries unspoken anti-Semites? There’s no other way I can explain the hatred of Donald J. Trump, of most democrats, despite the Abraham Agreement with the UAE and Bahrain!? Personally, I am politically curious to see whether there will be a result in the negotiations with Iran. I`m not an expert on this topic: “See the odds 50/50”. Nevertheless, I believe that the European countries, in the form of the EU, need a plan B. Not that we in Europe, especially in my home country Germany, are threatened with a sustained green Pyrrhic victory. Which ultimately only cost us taxpayers and/or consumers money. So that we feel morally superior to Trump’s Washington, Netanyahu’s Tel-Aviv, and/or Arabic oil….

US Stocks End Week On Sour Note

US stocks closed sharply lower on Friday, pressured by the outlook of aggressive monetary tightening by the Federal Reserve and the burden it could take on the world’s largest economy. St. Louis Fed President Bullard said that he is leaning towards a third consecutive 75bps rate hike in the Fed’s next decision, as there are no guarantees that inflation has peaked. Other policymakers also signaled that a dovish pivot is unlikely, with the latest FOMC minutes showing the Fed will continue to raise rates until inflation substantially cools. The Dow lost nearly 300 points, while the S&P 500 and the Nasdaq fell 1.3% and 2%, respectively. Technology and high-growth stocks were among the main losers of the session, tracking the decline for US debt. Extra volatility was also added to equity markets as $2 trillion dollars in options contracts were estimated to expire in the session. On the week, the S&P 500 and the Nasdaq dropped 1.1% and 2.5%, respectively, and the Dow booked marginal losses.

Dollar Resumes The Rally

The dollar Index hovered above 108 on Friday, approaching a 20-year high of 108.5 hit in July, and was up about 2% so far this week, lifted by hawkish remarks from Federal Reserve officials indicating their commitment to further interest rates hikes. In the latest central bank commentary, St. Louis Fed President James Bullard said he is considering support for a third straight 75-basis point rate hike in September and said he is not ready to say the economy has seen the worst of the inflation surge. San Francisco Fed President Mary Daly also highlighted the need to push interest rates into the restrictive territory, while Kansas City Fed President Esther George said she and her colleagues will not stop tightening policy until they are “completely convinced” that overheated inflation is coming down.

Crypto Markets Tumble

Bitcoin tumbled below $22,000, a level not seen in more than three weeks, as lingering concerns about a global economic slowdown sent shockwaves toward riskier assets. Other cryptocurrencies, including Ethereum, Cardano, Solana, and Ripple, also saw their values fall sharply, tumbling between 7% and 10%. For the week, Bitcoin, the world’s largest cryptocurrency by market cap, dropped over 10%. In the meantime, it seems like, even the most deluded money-hungry crypto currency bulls seem to have become more and more self-confident due to an increasingly expensive yield curve that cryptos are a cult – and not money. That there is interest, with far less risk.DEVISE 2 DAY Another 48 Hours – Where I Was Wrong, Where I Was Right

Long in the USDX (since 02/14/2002) around 96 points and/or also long MSFT (since 03/07/2022) around 285 USD are meanwhile our only two open long trading capabilities. In addition to our last long in the Dow Future at 31.140 (since 07/11/2022). After we realized our lost long FB trading capability (from 02/17/2022) end of june`22 with painfully 48 USD. Fortunately, MSFT stock had turned above our stop at 240USD. Since the start of last week i formulated a short trading capability also. So that we have 4 financial market price actions on play, this week! USDX long; MSFT long; DOW Future; and/or UKOIL short.

This week I will again put my main focus on the UKOIL price action. And not just due to the fact that oil is trading below 100$ again. And for me, admittedly also due to the weaker than expected economic figures from China last week, it is primarily due to war fatigue in relation to the war in eastern Ukraine. So I think the panic up, the war surcharge, is if you will, out of the UKOIL, under 100 USD! Even if no new agreement is negotiated with Iran in Vienna. I don’t think that the market, even the majority of market participants, will price in such high oil prices again for the upcoming winter. If I am not mistaken, the market already did that until the summer of 2022, which is just about to end. And that`s why is the UKOIL short trading capability still in every 4XSetUp technical analysis this week.In the DOW Future we will take profits at latest at 33.500 points above, if the price actions falling furthermore. So that we secure at least some profits. Because the US stock market has already risen very strongly on Wall Street. For many, much too fast and/or much too sharp. So from a psychological point of view, I’m actually secretly quite confident that the price market should hold at 33,500 points. And if not, not bad either. We will still be able to trade the DOW Future in the coming week, coming months, quarters and also years, if we want. And no market guy has ever died from taking profits, after realizing open trading positions! On the contrary. Better treat yourself. Maybe even buy your wife something. And/or something your children too! That’s why we trading, positioning or investing in the financial markets! Isn`t it?I am meanwhile assuming that the Fed will raise interest rates by up to 4% by the end of the year. At next three regular meetings of the FED, they will may be increase their key interest rate by 50 basis points. Which should push the 10-year up to over 4% and sustainably conservative the USDX above USD 110. And that too, if the US economy goes into recession in the second half of the year; because of 2 negative in the next two quarters 2022 ahead of us. The key question I ask myself about this future exceptation is: „How will the wallstreet, the us stock market, reacting?“ I dont know! So I’m keeping a low focus on the US stock market this week. And focus myself, on the UKOIL. I hope to read, hope to analyze, hope to evaluate (no) new information next weekend, after the FED meeting in Jackson Hole. And then to be able to formulate a promising 4XSetUp for you again…