Surprise Drop for Energy Coming
Crude oil went to the edge of a technical breakdown today at 81.75 on the Oct futures contract. When we look at cycles into the end of the month, they look lower and that suggests a break to 77.50 first and then 71.50.
Oil stocks as measured by the XLE oil stock index are also ready to break harder and we are wondering if 58.50 will come in next as the stock market is due to fall after the FOMC meeting.
Natural gas also issued a sell signal getting to 7.40 but it is recovering into the close but the damage is done and the next stop will be 7.02 and we wonder if lower numbers can come with cycle lows into Sept. 26th. That will pull UNG down.
It seems that the Biden administration will get the job done in getting gasoline prices down but the market is starting to fear recession and that is not a good long-term thing.
-Barry
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