One of the more interesting trading developments this week occurred in the worst of all places, where higher prices more likely portend accelerating business and personal insolvencies...
With its relative strength and momentum falling into balance unleaded gasoline is consolidating its huge gains since December — this with an upward bias, as noted one week ago — and seeing buying interest increase all the while. This week's $GASO volume pickup is another technical feather in the cap atop the head anticipating much higher gasoline prices.
$5/U.S. gallon probably is a slam dunk.
$10 by the first Tuesday in November is not out of the question, not with hyperinflationary breakdown of physical and financial economies on both sides of the Atlantic set to accelerate toward 1923 Wiemar Germany proportions, as pressure to expand bailout of a hopelessly insolvent trans-Atlantic banking system can only grow as contraction imposed via fraudulent "structural reform" and austerity today shaking the euro zone periphery spreads to the core and threatens lenders of last resort today propping up the banking system.
No mere coincidence with the ECB's helicopter drop of the past few months, then, is the push for war in the Middle East. This push, however, is not the driver of skyrocketing energy costs. Rather war might be better seen venturing cover for a still deeper swindle in store, imposing brutal sacrifice for a contrived cause whose full pursuit likely would shake the world to its very foundation.
Hyperinflationary bailout of the trans-Atlantic banking system simply cannot stop. Attending collapse of the physical and financial economy in fact is the real driver upsetting the social applecart and provoking war. Flat-lining economic readings hailed as "recovery" in truth are drowning in dissent sweeping across Europe. Yet hyperinflationary bailout will not stop, and so further physical breakdown threatens acceleration of a negative feedback loop whose effect could push energy prices straight through the roof. Thus, at the trailing edge in the eye of a financial hurricane is view of 1923 Wiemar Germany. Brace yourself for an insidious shakedown.
Once consensus turns from "we're not collapsing today" to "stocks might collapse tomorrow" the green, support-resistance line drawn above could prove an early pivot point in the long journey down to levels last seen in the 1987-1994 period. All the more following its successful test twice these past two years while a wealth of technical evidence reveals growing underlying weakness backing each subsequent bounce. Given an ominous fundamental and technical backdrop, then, the market's upcoming transition could develop rapidly and take out support like a hot knife through butter.
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