Are DOGE layoffs set to resume?
When the lyrically gifted modern poet LL Cool J put paper to pen to write one of his most celebrated and repeated songs, “Mamma Said Knock You Out”, do you think he was contemplating the current price action in West Texas Intermediate Crude? Maybe not, but I am, and the sight of oil rising from the depths in late North American trade yesterday had the lyrics, “Don’t call it a comeback! I’ve been here for years!” repeating time and again in my head. Now that the earworm is firmly planted in your head and you curse my name as you lay awake tonight regretting the decision that you’ve read this first paragraph, let’s see if this comeback is anything but a bump on the way down even further for everyone’s favorite oil product.
The decline of oil has been big news, not only in financial circles, but also for anyone who drives a vehicle of some sort. With the falling price of a barrel of crude, gas prices have been falling too, and it appears OPEC isn’t so much as batting an eyelash as their lifeblood becomes ever cheaper. The fact that OPEC doesn’t seem to care much makes me believe that this is just an attempt by speculators to squeeze some shorts and then short again at higher prices, which means we may be heading lower again soon.
Luckily, there are some technical levels that could supplement this theory as both a declining trend line and a Fibonacci based Bearish Gartley Pattern converge near current prices ($48.40-ish). If the over-supply side of the story continues to dominate for oil and the technical levels hold true, we could be headed lower over the next 24-48 hours. If that does indeed happen, we surely won’t be calling this a comeback, but simply a false sense of bravado for an instrument that hasn’t yet reached the ten count.
Figure 1:
