OIL: A VAGRANT GEOPOLITICAL BROTH

As shock and awe spreads across the geopolitical landscape,our fair maiden, Oil is in a precarious predicament,a position between a rock and hard place.The rock in this case is the line of sand drawn at the $80/bbl pricing acting as a major focal point and support test zone and the hard place in this scenario is the $94/bbl acting as the high heavens and cloud with a silver lining per se.Robust Oil demand is still in play across the periphery.Oil has become the gift that keeps on giving.Aggressive long liquidation leaves the markets exposed to a strong geopolitical bid as it has a direct effect on oil production and transportation in the Middle East.

Safe haven bids have been piling up especially on the metal complex specifically Gold(Highs of $1989.50/ounce with $100 range in a week) & Silver at $23.41/ounce,also remembering Swiss Franc #CHF on the Forex tabs should be a bunker to play in.

The start of the 4th Financial Quarter was a calm before the storm,experts trying to navigate the murky waters after the Saudi Cut were hit with another bombshell coming about the Gaza Strip. In the week to October 3rd,hedgefunds reacted to an emerging correction in CrudeOil by cutting their WTI & BRENT long by 33k lots to 525k thereby making a small reduction in the 170k that was brought during the 3 week peeiod of September.Subsequently,escalations and drums of war developing caused a squeeze within the Oil market cycle with a rush of adrenaline amongst the bulls that showed sufficient strength to tip the scales above the $90/bbl crossing towards highs of $92/bbl on the #BRENT & $91/bbl on the Crude WTI.

We are waiting to see the materialisation of the Oil embargo against Israel as suggested by the Iranian Foreign Minister. Deadcats have a tendency to bounce,local dehorning is a variable to keep in check.

Natural Gas has been a tad bit volatile with a support zone brewing on the Weekly tabs at 3.02/mmBtu after the sharp decline within the monthly channels.Weather is starting to play a key factor here,so its best to keep your eyes peeled,guns at the ready if need be.

We are in focus on the Emerging Markets(EM) Data as they bear the brunts of the geopolitical spat ongoing.Some pairs to look upon are the PolishZloty,NorwegianKrone,SwedishKrone,MexicanPeso&SouthAfricanRand.Yen has also surpassed the 150 handle with weakness in its reigns and more guidance is to be placed by the BoJ in correlation to the FED with respect to the DollarSpotIndex(DXY).

October is a month of balance of scales as historical data suggests,Brace yourselves for an influx,Hedge your bets if need be as the Oil markets are about to get messier would be my advice for the month.Clarity will come after the fog has been hit by the fresh sunrays of the new month incoming.Resilience is the key word,faint hearts will falter however,wheat has to be separated from the chaff in all respects.When the tide settles,will you be the one swimming naked ?Many blessings in your endeavours traders and may peace prevail as we get into the holiday season for the years end.

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Andy Warr,

TophatFinanceGroup.

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