Oil came close to the levels I had given last week; if the risk situation continues, a move to the $100 area becomes inevitable.
The re-ignition of the US-Iran conflict produced a classic, short, and sharp “risk-off” event.
Oil rose, #crypto pulled back, and hundreds of millions of dollars in positions were liquidated, mostly on the long side.
The fact that the spot decline remained limited shows that the main issue is not a collapse in demand, but the leverage structure.
What comes next depends on three factors: the scale of the escalation in the Middle East, the oil-inflation-Fed triangle, and how quickly traders restore leverage.
This could be a one-time cleanup, or it could be the first sign of a more fragile period.
The re-ignition of the US-Iran conflict produced a classic, short, and sharp “risk-off” event.
Oil rose, #crypto pulled back, and hundreds of millions of dollars in positions were liquidated, mostly on the long side.
The fact that the spot decline remained limited shows that the main issue is not a collapse in demand, but the leverage structure.
What comes next depends on three factors: the scale of the escalation in the Middle East, the oil-inflation-Fed triangle, and how quickly traders restore leverage.
This could be a one-time cleanup, or it could be the first sign of a more fragile period.