WTI Jumps to $78, Key Fibo Level - The Next Big Risk?Mega-cap tech’s climb to jumpstart 2024 fooled many strategists who called for value, cyclical, and small-cap niches to outperform. The same old playbook has been in full swing, but could that be about to change? Consider that banks, not chips, ended this week at fresh multi-year highs following a late-week pullback among the big semiconductor names.
But there’s more action out there that few are paying attention to. Have you seen WTI crude oil recently? Tensions in the Red Sea have been ongoing for many weeks, but it has just been over the last few sessions that WTI has taken flight. The prompt month now trades near $78. Gasoline futures, meanwhile, rose above $2.30, implying a national retail pump price average near $3.25 over the coming weeks.
Consumers might not like that, and it would come immediately after a sanguine set of University of Michigan Surveys of Consumers for January. We will get an updated read on that Friday next week. I also point out in today’s featured chart that US light sweet crude oil is now at a pivotal Fibonacci retracement level on the chart. Watch how the bulls and bears battle it out as the calendar flips to February. If we rally through $78, and hold it on pullbacks, a rotation in the market could very well take place, right as mega-cap tech reports Q4 results.
