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Worsening Geopolitical Tensions in the Middle East
Tensions in the Red Sea
The tensions in the Red Sea seem to be escalating. We are seeing constant news stories about freighters being attacked by huthi militia groups and explosions at Red Sea ports. The Iranian military is even stepping up their military presence in the Red Sea. Iranians are sympathetic to the huthi forces, so this will only exacerbate the problem.
How long will the conflict last?
I have seen Middle Eastern conflicts last anywhere from several years to just a few weeks. This specific conflict seems like it will last a while. The United Nations has even put together a maritime defense force spearheaded by the U.S. to combat the problems in the Red Sea. And the Isreali conflict is expected to last several months. This shows me that the Red Sea tensions will stick around for a while.
Will geopolitical conflict lift oil prices?
I have seen conflicts in the middle east effect world markets. Especially commodities markets. These geopolitical tensions are putting upward pressure on oil. Higher oil prices can equate to higher prices on all commodities. This will add to the inflation worries investors have been contemplating on. If major global economies experience a turnaround in 2024 and finally see some substantial growth, then that would add to the upward pressure on oil prices.
Possible Swing Trade Opportunity?
So far, oil prices have not had any sustained upward movement even with all of the conflict around the world. But crude futures prices are near an inflection point. After seeing a very strong day like today near a valid technical level, it would be wise to keep watch on oil prices. There might be a good swing trade opportunity coming soon.
I know oil prices are mainly driven by macroeconomic factors like supply and demand. But the charts will still follow the principals of TA quite well. And there is a solid technical setup in the works.
In the chart directly above, you can see the clear price channel that oil futures have been following for several months. I have highlighted a long-term fibonnacci level with a green line. This is a strong support level as the price has already rebounded off of this level twice last month. today would be the third rebound. If today's rebound is strong enough, then we might see oil climb out of its downward price channel.
At that point, I might consider a long position for a short-term swing trade. If I see the price action reject the top of the price channel, then I will consider a short position for a quick trade.
As always, I am not a financial professional, and this is not investment advice. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Don't invest money that you can't afford to lose. Give some of your investments time and know when to cut your losses.
Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. Do your own due diligence. And just follow the trends. A trend is your friend. Good luck trading.
$United States Oil Fund LP (USO.US)$ $Chevron (CVX.US)$ $Marathon Oil(Delisted) (MRO.US)$ $Duke Energy (DUK.US)$ $Devon Energy (DVN.US)$ $Valero Energy (VLO.US)$ $ConocoPhillips (COP.US)$ $Phillips 66 (PSX.US)$ $Shell (SHEL.US)$ $BP PLC (BP.US)$ $W&T Offshore (WTI.US)$ $SPDR S&P Oil & Gas Exploration & Production ETF (XOP.US)$ $Energy Select Sector SPDR Fund (XLE.US)$ $MicroSectors Oil & Gas Exp. & Prod. -3x Inverse Leveraged ETN (OILD.US)$ $MICROSECTORS OIL & GAS EXP. & PROD. 3X LEVERAGED ETN (OILU.US)$ $Imperial Petroleum (IMPP.US)$
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🎙️Discussion: 1. How will tariff policies affect the movement of key assets such as U.S. stocks, gold, and Bitcoin? 2. Given this context,
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MadGuineaPig : bullish on transport. ify on production. least till April may?
SpyderCall OP MadGuineaPig : sounds good to me. Just loke today, shipping companies have already had a very strong couple of months. This trend could very well continue.
Nicco330 : this is awful
SpyderCall OP Nicco330 : indeed, it is awful... War is never pretty![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Johnny Mnemonic MadGuineaPig : what transport companies should I be watching?
MadGuineaPig Johnny Mnemonic : $Transportadora de Gas del Sur (TGS.US)$ has been fun most recently. honestly I haven't stayed up on sector since the first quarter. I imagine natural gass could see gains if it gets cold this year. sorry I really have nothing of value to offer here at the moment.