MBCC Trading Highlights 14th October'22 - bear markets are known to suck in the bulls and trap the bears, but now what?

As you can see the market got back to the 20 day mov average of 3650, but the bulls need to hold this, if not, it can fall back down to 3585-3600 and then lower to 3385, the highs of pre covid levels. If the bulls capture 3655, we can get to 3700 and then 3750 and 3800, but the big picture does not change till we can break > 4000.

Now positioning into this event as seen in the chart below, was quite bearish. L/S hedge fund positioning overall had been reduced a lot over the past few weeks and the put/call ratios were super elevated post the UK Gilts/GBP mess of the last few weeks. Now this market is as much about positioning as it is about fundamentals.

So do we go back down or head higher? Derivative positioning is playing a big role in the market moves. Next up we have the Fed FOMC and then the Chinese plenum - where is the pain trade? What does that mean for Gold, Silver, Oil and Dollar?

We also discuss the Oil market and refining margins. Why are they strong and what can they do into Q4, implications for the Oil price. Remember spreads only tell you what HAS happened, not what WILL happen.