Oil up, Nasdaq down, Trump turns on Kyiv

On Friday I went short the Nasdaq on the chart, which I shared in Discord. We had seen several days of decline with sellers in control, and price broke below an important support. However good your hypothesis is, it is important never to get stuck in confirmation bias. The White House obviously wants oil prices down and stocks to keep rising before the midterms on 3 November. But this week both went the other way. Brent rose 5.2% to 109.9 dollars, and the Nasdaq 100 fell 5.5% and sits 7% below its ATH. If we fall more than 10% from the ATH, below roughly 28,200, the risk grows that we enter a bear market.

1The White House can reach WTI, not Brent

Tax-exempt diesel may now be driven on public roads, and oil from the reserve is being offered as a loan. Everything targets America’s own supply, meaning WTI and the price at the pump. WTI still rose 8%, more than Brent. US crude inventories fell 8.6 million barrels according to the EIA, the most since February, when 0.3 million was expected. Hurricane Isaias shut platforms in the Gulf of Mexico and production fell around 300,000 barrels a day. Imports fell more than twice as much, according to Mizuho because cargoes stayed away during the hurricane.

Brent is decided in the Gulf, where the White House evidently is not in control: twelve ships were attacked this week according to UKMTO, and Saudi Arabia confirmed a missile strike at Aramco.

2Trump turns on Kyiv

A month after Trump signed the sanctions law against Russia, he paused it on Friday, two days before the tariffs were due to kick in. The pressure is now aimed at Ukraine. On the strikes against Russian refineries, Trump said: “All he’s doing is making the world oil price higher.”

3The AI buildout needs energy and capital

Yields fell this week, but the Nasdaq 100 fell anyway, and Friday was about the AI companies.

A Brookings study estimates that AI infrastructure in the US could require around 10 trillion dollars in 2025–2032, a larger share of the economy than the railroad, highway and telecom buildouts ever took. According to the same study, the new data centers would draw as much electricity as all American households. Construction costs are being driven up by fuel prices, among other things, according to Bloomberg. The pressure to deliver is enormous, and CoreWeave fell around 25% on the week.

The same thesis in Europe

On Saturday between 550,000 and 800,000 people in France marched against run-down schools and the high cost of living, more than 2,300 were arrested, and the 1883 town hall in Limoges burned. The marches were mostly peaceful, but many took advantage of the situation and looted shops in around fifteen cities. France has promised cheaper diesel from its stockpiles.

Be water

When a hypothesis doesn’t play out, I drop the bias and follow the chart, a day, an hour, fifteen minutes at a time. We want to join the move once it has started, not guess where it starts.

The week ahead

• Wednesday 16:30 CET: EIA crude inventories. Do they keep falling now that the hurricane is over?
• Wednesday 22:30 CET: Meta’s earnings call, Tesla’s at 23:30. Investment against revenue.

Oil and AI debt

Right now it is very unclear whether the White House will manage to bring fuel prices down. My hypothesis: as long as Brent rises, the White House will not get through to the pump before the election, and then the Nasdaq 100 has both oil and the AI companies’ debt against it. The likelihood of a further decline grows, but I trade it one day at a time.