>>50176635
Market breadth in oil futures contracts is incredibly weak at this point. Several reasons for that:
>No speculator wants to risk going long into recessionary collapse. Open interest is low. Stops are tight and open for the picking.
>Hedging costs for consumers have become expensive, so hedging a similar dollar value means less barrels hedged.
>On the other side, oil E&Ps have repaid substantial debt and have liquidity to avoid hedging future production. With steep backwardation in the curve, it makes sense not to bother hedging.
>SPR release has capped upside, while refinery margins and a general supply/demand imbalance has capped downside.
>It's a holiday weekend and peak summer vacation time, less attention is being paid towards markets
So what happened today was that at precisely 9 am, some whale dumped a boatload of contracts and triggered a flash crash. No one was willing to jump in and catch the falling knife because of the reasons above, so the chain liquidations continued until it hit that mental comfort level around $100. It overshot a bit, as tends to happen during capitulation.
Don't expect much of a bounce tomorrow, but it should slowly grind back up until a few weeks from now it repeats the same shit again.
Oil will stay rangebound, stocks will remain pressured until they ramp up buybacks and reach the point where momentum flips positive hard enough to bait a new wave of swing traders - likely in November.
On a longer timeframe, oil/energy remains the single best sector to buy and hold in a set it and forget it account, like your IRAs.