America’s energy shield
Europe and Asia are getting hammered by soaring energy prices. The US, with far less exposure, is once again coming out ahead.
Financial markets seem ready to absorb Iranian strikes against the US embassy in Saudi Arabia and Israeli strikes in Lebanon. But when it comes to the Strait of Hormuz or energy infrastructure, the reaction is completely different.
Oil prices have been watched like a hawk since Operation Epic Fury began. They’re now driving stock market moves with one major fear: that rising energy costs could trigger an inflationary shock similar to the 1970s and 80s.
The European Union and Asia are heavily dependent on Middle Eastern energy resources, putting them on the front lines of this conflict whether they like it or not. Liquefied gas prices have jumped 30% in Europe after the world’s largest facility was shut down by an Iranian drone strike. Meanwhile, the US is dodging the worst of it thanks to being the world’s top energy producer.
Retrospective
Buyers initially scored some wins by breaking through daily support 1, bouncing off the key 48,750 point level, and accelerating toward the symbolic 49,000 point threshold and daily pivot point.
However, short sellers managed to regain control late in the session. They countered the buying push toward the weekly pivot point and blocked the attempted bounce toward 49,000 points.
My analysis:
- Side in control: sellers
- Side under pressure: buyers
- Dominant buyer emotion at the last high: optimism
- Dominant seller emotion: cautious
- Trend: bearish
- Phase: consolidation
My trading plan for the day
This content is not investment advice. This trading plan is shared purely for educational purposes to give you insight into how one trading veteran prepares and thinks through the market.
The underlying trend remains bearish, but short sellers just hit their first major target (monthly support 1 and the 48,000 point level).
For today’s session, I’ll stick to scalping operations. I’m not necessarily looking to play a deeper bearish acceleration and I’ll watch for the possibility of another intraday breather.
Maxime holds two master’s degrees from the SKEMA Business School and FFBC. As founder and editor-in-chief of NewTrading.fr, he writes daily about financial trading.
The phony war
Controlled Skid
Peace pipe