News over the weekend of an attack on an airport in Riyadh, Saudi Arabia, that caused casualties prompted concern and discussion about what might happen next in the Middle East. Yet oil did not rise at the start of this week as many had expected. After opening slightly higher, it has now fallen by more than 1%. That does not mean oil’s upward path has ended. On the contrary, if the pullback lasts long enough and goes far enough, oil could still retest its highs, especially if accompanied by new U.S. actions.
After a substantial rebound and recovery, WTI crude oil repeatedly produced “9” signals on the daily chart and eventually began to pull back around mid-September. Bears are now testing trendline support dating back to July, and a break below it is quite possible. With no new geopolitical developments to drive the market at present, the adjustment could take the form of either a gradual decline or a sharp drop. There is also a concentration of relatively strong support around $80. A retest of that level would help make any subsequent rise more sustainable.
A decisive turn still needs a catalyst in the news. The path we previously expected for the year—ceasefire, prolonged standoff, then renewed fighting—has only one stage left: a fresh flare-up in the fourth quarter. Around the midterm elections, this is an important variable and a key reference point for trading at year-end and next year. Trump has, in fact, said several times that he would strike Iran again. Given his history of making such threats, however, this is still a “cry wolf” situation. If events ultimately unfold as we expect, going long oil and short risk assets would be the only choice. If they do not, the slow bull market in U.S. stocks and range-bound trading in most assets are likely to continue.
When comparing price moves, we can focus on the spread between WTI and Brent crude. At the low of this pullback, the gap between the two was only around $3 per barrel; for much of the crisis peak, it was above $10. It remained above $10 at the start of this week, indicating that the market’s rationale for pricing Brent at a premium has not changed. We may need to see the spread narrow and then widen again before a genuine new oil bull market begins. It is also worth noting that if WTI breaks down first, Brent, despite being stronger, still faces a clear risk of falling afterward. From a trading perspective, the task now is to wait patiently for oil to reach a more attractive interim low before entering. Trading the spread is, of course, another option; readers can make their own assessment. $美国原油ETF(USO)$ $马拉松原油(MPC)$ $WTI原油主连 2611(CLmain)$ $小原油主连 2611(QMmain)$ $布油现金主连 2612(BZmain)$
In addition, our order to short Ether on a downward move was filled last week. The near-term direction of cryptoassets remains useful as a leading indicator. Under normal circumstances, if Ether continues to fall and moves below 2360, that would effectively signal the end of the rebound that began in July. It would also indirectly suggest that a turbulent fourth quarter is approaching. But if Ether pulls back and then rebounds—or even makes a new high for the rebound—the likelihood of risk-on conditions persisting over the next three to four weeks would rise substantially. At this stage, we need to remain patient and accept the possibility of giving back some unrealized gains. $以太坊ETF-iShares(ETHA)$ $微型CME以太币主连 2610(METHmain)$ $CME以太币主连 2610(ETHmain)$
On trades, the euro has made another low, so this week we are adjusting our euro orders: limit sell orders at 1.1360 and 1.1440, a stop-loss at 1.1580, and a target at 1.09.$欧元主连 2612(EURmain)$ $欧元指数(EURindex.FOREX)$
For crude oil, the protective stop at 88 was triggered last week. As a result, the long position originally entered at an average price of 75 has now been fully closed at an average exit price of 91.5. Starting this week, we will continue to maintain limit buy orders for oil at 83 and 75, with a stop-loss below 67 and a target of 115. $美国原油ETF(USO)$ $马拉松原油(MPC)$ $WTI原油主连 2611(CLmain)$ $小原油主连 2611(QMmain)$
The Ether sell order added last week, designed to enter short on a downward move, was filled at 2645. This week, we are raising the stop-loss to around 2644, near the entry price, and slightly adjusting the targets to 2380 and 1850. $以太坊ETF-iShares(ETHA)$ $微型CME以太币主连 2610(METHmain)$ $CME以太币主连 2610(ETHmain)$
P.S. If a trade reaches its first target, the stop-loss will automatically be moved to the entry price. Any changes after an order is filled will be covered in subsequent articles.
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