TACO Trump ----> Became FAFO Trump

Don't Get Caught Holding The Bag

“The stock market is a device to transfer money from the impatient to the patient.”

Warren Buffett

An eventful weekend to say the least!………………….

Followed by this post …………..

It was a busy weekend for government staff in DC. As of 10:38 p.m. ET Saturday night, Pizza delivery wait times were four times longer than usual in the DC area. That unusual activity has remained throughout Sunday.

Regardless of political views, the exhibition of military might by the United States this weekend was one that hasn't been seen in decades. No other nation could have accomplished this military operation with such stealth and precision.

I believe the volatility caused by this weekend’s bombardment will subside by Tuesday, especially the crude market.

Why so bearish, crude?

The bullish narrative surrounding crude oil has several flaws. Let’s take a look at the two major ones:

1.) The reduction of Iranian crude will be highly disruptive to the supply chain.

Iran produces just 2% of the world’s crude, which is mainly sold to China. Saudi Arabia can rapidly increase production and replace the Iranian supply gap…… This month alone, Saudi Arabia and the UAE increased production by 870k b/d.

2.) Iran will close the Strait of Hormuz.

This would be ECONOMIC SUICIDE FOR IRAN. I repeat, this would be ECONOMIC SUICIDE for Iran! 80% of Iran’s crude oil exports flow through the Strait of Hormuz, of which 80-90% goes to China. Closing the Strait would criple their economy and aggravate their #1 client.

At the opening of the Futures Market, Crude jumped close to 4% but has given close to half of that back. I expect this fade to continue downward below $75 over the upcoming week.

The Team will be looking at short energy names throughout the following week. Please keep your Chat notifications turned on!