Macro Recap & Crude Oil Trade Setup

CL1! MCL1!

Markets Overview
Markets have largely shrugged off the U.S. government shutdown, with major indices pressing to fresh all-time highs. While the headline optimism continues, it’s important to note that over one million federal employees remain furloughed, leading to delays in key economic data releases and potential short-term distortions in macro readings.

Despite the Atlanta Fed GDPNow model projecting stronger growth, underlying household dynamics suggest stress ahead. Lower-income consumers, already contending with tighter credit and depleted savings, are likely to see further deterioration in spending and sentiment, which may weigh on Q4 consumption trends.

Market Positioning & Flows
While equities appear to be in a new leg of the bull market, positioning data suggests this may not be entirely organic. According to publicly available data many hedge funds continue to under-perform the S&P 500, forcing catch-up buying after missing the April lows. This dynamic may also be contributing to the current momentum-driven equity strength, even as macro headwinds persist.

Metals Performance
Precious metals have been standout performers year-to-date, reflecting declining real yields and persistent inflation hedging flows:
• Gold: +42.46% YTD
• Silver: +56.88% YTD
• Platinum: +71.29% YTD
(Source: Finviz YTD Futures Performance)

This rally underscores a broader rotation toward real assets, consistent with expectations of lower real interest rates and a weaker U.S. dollar trajectory.

Crude Oil Technical & Trade Setup
Crude oil prices reached $66.42 in September before retracing lower. The recent OPEC+ announcement of additional voluntary cut unwinding at a pace of 137 kbpd for November adds a modest supply-side loosening.

From a technical perspective, price action has bounced at the yearly Volume Profile’s Value Area Low (VAL), a key area of structural support.

Current positioning shows:
• Price trading below Q2 VAL
• Price trading above yearly VAL (yVAL)

Scenario 1: Long on Reclaim of Q2 VAL
• Setup: Watch for crude to confirm acceptance back above the Q2 VAL as a support level.
• Trigger: Long entry on confirmation of acceptance above VAL.
• Target:
o First target: 2025 mid-range at $62.97
o Secondary target: Yearly open at $65.17

Scenario 2 : Long on Deeper Retest
• Setup: Should price reject Q2 VAL, patience is warranted.
• Entry Zone: Wait for price to move lower toward yVAL and March 2025 low confluence.
• Target: Return move toward 2025 mid-range ($62.97).


Despite near-term noise from policy uncertainty and supply adjustments, the broader technical structure favors accumulation on weakness rather than chasing momentum.
Crude remains range-bound but biased for upside stabilization into Q4, supported by resilient demand and disciplined OPEC+ management.