Crude Oil Strategy: The guest argues the market underestimates the duration of the supply disruption, highlighting extreme backwardation and advocating positioning on the deferred WTI curve via a defined-risk bull call spread.
Energy Disruption: Prolonged Strait of Hormuz and Iran-related issues could force shut-ins, potentially extending supply impacts for months and elevating global energy prices.
Equities Outlook: Despite geopolitical risks, equities rallied on tech leadership; near-term momentum and earnings could drive the next leg, but the guest maintains S&P downside hedges.
Dollar and Euro: The dollar index has turned up on euro weakness, with a focus on key technical levels and geopolitical timing possibly influencing near-term moves.
Gasoline vs. Crude: RBOB gasoline showed relative strength and sits near 52-week highs, potentially signaling further upside for crude if a breakout follows.
Precious Metals: Long-term bullish on gold, but near-term charts across gold, silver, platinum, palladium, and miners look heavy with risk of deeper consolidation.
Uranium Miners: Bullish long-term structural case remains intact with improving technicals, though a broad risk-off could temporarily derail gains.
Rates Correlation: 10-year yields are tracking oil; a crude breakout could push yields toward 4.40–4.50% short-term, while the broader expectation is for lower rates in H2.
Transcript
Now, back to your hosts, [music] Eric Townsend and Patrick Ceresna. Eric, it was great to have Ole back on the show. Now, listeners, you'll find the download link for this week's trade of the week in your research roundup email. If you don't have a research roundup email, it means you have not yet registered at macrovoices.com. Go to our homepage and look for the red button over Ole Hansen's picture saying looking for the downloads. Patrick, for this week's trade of the week, Ole contends that the market is underestimating how long this energy disruption is really going to last. The forward curve is already showing extreme backwardation, and Ole explained in the feature interview how that spells opportunity for investors. So, how do you position in crude oil with options farther out on the curve, assuming that you think Ole has the call right? As Ole highlighted, this is not simply a short-term geopolitical spike in oil, but a shift in the structural floor beneath the market. The acute tightness at the front end has created pronounced backwardation, but the more compelling opportunity sits further out in the curve, where deferred prices still appear underpriced relative to the likely duration of this disruption. So, rather than chasing front end volatility, the trade is about positioning in the deferred part of the curve to capture both a higher equilibrium price and that carry profile. Now, the most direct way to express that view would be through a long position in the deferred crude oil futures, but instead of taking outright futures risk, I want to introduce asymmetry into the structure, defining the downside while preserving meaningful upside convexity if the repricing higher unfolds. So, this week's trade of the week, I'm expressing the view through a bull call spread in WTI. While spot crude oil prices are trading around $94 at the time of this recording, this structure focuses on the December 2026 WTI contract currently trading near $77.40 with approximately 211 days to expiration. Using the corresponding November options with roughly 208 days to expiry, the trade begins by purchasing the deep in the money $70 call for approximately $11.70, of which $7.40 is intrinsic value. To offset the remaining time value premium, I'm selling the $90 call for roughly $4.40, creating a $20 wide call spread for a net debit of approximately $7.30. What makes this structure compelling is that the premium paid is a largely intrinsic value, resulting in break-even near $77.30, essentially in line with underlying futures price. In practical terms, that significantly reduces Vega exposure and minimizes time decay, effectively transforming the position into a defined risk high delta exposure with embedded convexity. Rather than paying heavily for optionality, you're primarily owning intrinsic value while financing the trade through the sale of the higher strike upside. From a payoff perspective, max loss is limited to the $7.30 debit with a max profit of $12.70 with almost no carry cost, creating a favorable asymmetric profile while maintaining exposure to the deferred curve. The objective is simple, use a capital-efficient bull call spread to express a higher structural floor in oil, capturing upside repricing with defined risk and reduced sensitivity to volatility. Patrick, every Monday at Big Picture Trading, your webinar explains how retail investors can put on our most recent trade of the week. For those listeners that want to explore how to put on these trades in greater detail, don't miss out on a 14-day free trial at bigpicturetrading.com. Now, let's dive into the post-game chart deck. All right, Eric, let's dive into these equity markets. Patrick, so far as I'm concerned, the ceasefire has mostly already collapsed just as I predicted that it would, but equities are shrugging off higher crude oil prices and continued to rally to new all-time closing highs on Wednesday, despite the fact that it's pretty darn clear that the Iran crisis isn't quite over yet, and frankly, I don't think it's anywhere close to over. So, as I explained when this all began, the usual wartime playbook starts with a big panic sell-off. Oh my gosh, there's a war on, sell everything. Then people calm down and remember that wars are always inflationary and usually good for the stock market, even if they're bad for humanity. In many ways, it feels like that's what's happening here. You know, the initial shock is over, we're used to this now. The stock market is rallying because obviously this means that there's going to be more spending on defense and buying more weapons and, you know, inflation factors and so forth. It seems like that's what's happening. The thing is, an energy delivery disruption that threatens to halt the global economy definitely is not bullish for equities. The market seems to be convinced, and the market's usually more right than I am, so maybe I'm wrong on this one, but the market seems convinced that this is all going to go back to normal soon enough, and the risk posed by the continued closure of the Strait of Hormuz isn't as big of a risk as was first feared. I disagree. I think it's a very big risk, and furthermore, I think that risk is growing exponentially with every day that this continues. So, my S&P hedges expired worthless on Friday, and I replaced them same day with a new put spread, 6,800 to 6,000 bear put spread on S&P futures. I don't think this is over yet, and you know, hey, if that too expires worthless and I give up all that premium as insurance cost, I would much rather have been wrong on that one, and I'll be delighted to watch those hedges expire worthless as well. Meanwhile, I'm happy to have downside protection in place because I think this is a long way from over, and I do think that the energy disruption as a result of the continued closure of the Strait of Hormuz is a big deal for the global economy and ultimately for the stock market. Now, to be clear, if I'm wrong about the geopolitics and it really does blow over in the sense of the strait really and truly reopening, traffic can flow without disruption, oil tankers just go about their merry business, then it really is over, and I think the stock market rallies considerably from there when it's over. I just don't think we're there yet. Well, Eric, I want to speak to the technical levels. First of all, we had an extraordinary 23-day April bull run on the upside that has the market trading at a pretty overbought level on the upside, up 13% in over those 23 days. We're trading along those 52-week highs. Now, what really drove this was a lot of systematic drivers. There was a huge flip back on the bull side by CTAs, vol targeting funds getting back in. So, we've seen vol normalization. We are seeing dealer gamma completely collapse, creating a van a tailwind to the upside of the market. So, there was a lot of structural buying. We're now at a level where much of that structural buying is now rearview mirror. I think in order for the market to make its next leg higher, it's going to have to be driven by earnings. So, what we saw was a substantial reversal of the prior 6-month sector rotation. The Mag 7s came out of the gate very strong. The QQQ went ripping higher. We saw a tech-driven advance on the upside of this market. So, with the fact that we have the earnings of five of the Mag 7s next week, they're going to determine whether or not there's another bullish impulse towards us a 7,400 on the upside of the market. Now, again, that is defining the the macro logic that you were referring to, but on the short term, liquidity and momentum may take this market higher. Overall, I think that once that exhausts itself going into May, we will we could see all sorts of potential reversal points, but at this stage, in order for us to have any serious technical damage, we would need to see over a 5% drop in this market at this point to really start reversing the flows that have really driven this market higher. So, while I'm not too optimistic about the asymmetry of the opportunity in terms of how much upside there is on the market, there also doesn't feel like the backdrop of an imminent market drop. So, it's one of these things where we have to respect the prevailing trend and see whether the earnings can give it that extra impulse to go another leg higher. All right, Eric, let's touch on this dollar. Patrick, we still have a big unfilled gap on the Dixie chart running up to 99 spot 38. That's from after the ceasefire was announced, and I expect that to get filled shortly after the third US aircraft carrier battle group arrives in the Gulf theater, which should happen around the end of this week. So, I think this weekend could be when the fighting resumes, but eventually, I think the dollar downtrend, and and that, by the way, coincides with Originally, Trump said he was going to extend the ceasefire kind of indefinitely and then he put a 3 to 5 day time limit on it. That's the amount of time it takes for the USS uh George H. W. Bush to circumnavigate the continent of Africa. They didn't go through the Red Sea and the Suez Canal, I think because they were afraid of being targeted by the Houthis. So, they had to go the long way around Africa. That's going to take 3 to 5 days to get there. Let's coincidentally enough the ceasefire that Trump gave gave an extension to just happens to coincide with when the uh carrier Bush will arrive in the combat theater. I don't think that's a coincidence. Well, the dollar index has turned up and it's really being driven by the last few days of weakness in the euro. And to me, I want to continue to focus on that euro chart. The euro failed along the 118 level and that to me remains a very critical line in the sand. If the current environment in Europe will inevitably lead to some sort of economic weakness because of the uh geopolitical and uh macroeconomic backdrop, uh then a euro uh breaking down would almost certainly be the bullish tailwind that the dollar index would need to go higher. Will we see the euro weaken back toward 115 is the thing on my radar. All right, Eric, let's just touch on crude oil. Well, once again, I question whether macro traders understand the lag effects in the physical delivery of crude oil. JP Morgan says that Iran can only withstand about two more weeks of having its crude oil exports blockaded by the United States. Now, it's not quite the same thing as the Hormuz closure. It's the US stopping Iran's exports. If that US blockade continues to be successful for more than about two more weeks, Iran will be forced to begin shutting in its oil production and after about one more month, Iran would be forced to substantially shut in most if not all of its oil production because of a lack of any place to store the oil. Once shut in, those wells take a long time and cost a lot of money in order to bring back online. That means it's plausible that the US could resort in a worst case if they can't succeed militarily on other fronts, they could get into a wait them out game where they say, "Okay, we're going to you know, wait out Iran, force them to close in their wells which creates an economic collapse for Iran so they don't have to target civilian infrastructure with military strikes, which I hope for the sake of innocent civilians they won't resort to doing." So, the length of time that the global energy supply could be affected by all this increases exponentially from here. And the reason I say exponentially is if you get to the point where Iran and other countries are forced to shut in their oil production. Let's say we go two more weeks and there's a bunch of shut-ins. It doesn't mean that it extends the disruption for two more weeks. It extends it for the two weeks that it takes until that happens and however long it takes after they shut in that production to bring it back online, which could be months. So, two more weeks of this could result in two or three more months of disruption of supply to the global economy, higher oil prices, stagnant economic activity, decreased profits could be really bad news for equity markets and everything else. So, it's important to understand if it goes on a few more weeks, it could be a few more months in terms of the resultant effect. And again, many other producing countries, not just Iran, would be forced to close in their wells. So, if the US has to resort to waiting out Iran closing in its wells as a way to end this conflict without having to target civilian infrastructure, well, the consequence is going to be everybody else closes in their production. That means we could have 6 to 12 months of dramatically elevated energy prices globally, completely screwing up the entire global economy. So, I say this is a bigger deal than most traders seem to be predicting. I could be wrong and frankly, I hope to be wrong on this one. Well, Eric, we have crude oil continuing to trade above its 50-day moving average and found some critical support along retracement zones. So, overall, while it was a deep pullback, it could have just been because oil was overshot on the upside and uh a few tweets were able to create this mean reverting correction. But as the backdrop we've talked about is there, it will be interesting to see whether crude oil can muster up another bull advance back up towards its highs. The particular thing that I wanted to touch on though that's more interesting is the fact that the pullback in RBOB gasoline was nowhere near as deep as WTI. And while this uh you know, multi-week correction on gasoline came down to the 290 level, we're back up to 52-week highs on gasoline. It'll be really interesting to see whether we have a fresh new breakout on gasoline futures and whether that's a leading indicator to the fact that crude oil still has some more upside ahead of it. All right, Eric, let's move on and discuss these precious metals markets. Patrick, I remain convinced that we're ultimately headed to new all-time highs in gold. But uh you know what? Tactically, I'm getting pretty darn nervous about this chart. It's looking more and more to me like lower highs and lower lows. It's developing a pattern here. And if I'm right about oil price induced inflation lasting longer than most people expect, well, that's going to be a longer headwind and a bigger, stronger headwind than is currently priced into the market for gold. I see 4685. That's the 38.2% Fibonacci retracement as a critical level. A close below that suggests much more downside is possible and maybe even new cycle lows below 4100 could be in the cards. Now, to be clear, when the Iran conflict really and truly is over and the global energy system begins to return to normal, I think gold will rally and rally hard to new all-time highs. But that could be quite a ways off the way things are going. So, I'm kind of waiting to see what happens at 4685. We touched that level. It looked like we're about to trade down through it and then Trump extended the ceasefire for At that point, it sounded like indefinitely. Now, it's scoped down to 3 to 5 days. Let's see if we can hold above 4685. If not, I start to get really worried about where we're headed next. Well, Eric, I have similar concerns about gold. So far, the entire rally that's lasted throughout April has barely tested the 50-day moving average and a fib retracement zone and it seems very heavy like it's rolling over. The thing about gold is is that uh that we're seeing the exact same pattern on silver, platinum, and palladium. So, in including the gold miners themselves. So, what we had was clearly some sort of a topping formation and maybe there's still a little bit more more correcting to go. I remain quite bullish long-term gold. The question here is will the second quarter of the year be much more consolidation that creates the next compelling buying opportunity uh for a potential second half of the year rally. All right, Eric, let's have this conversation about uranium cuz it's been a relatively quiet for the last month. Well, we're seeing a nice brisk recovery in uranium miners and the stochastics and RSI on the weekly charts suggest that there's more room left to go even higher. So, as long as the broad market risk-off event doesn't spoil that party, I think the chart looks really bullish. The thing is I'm as I said earlier, kind of concerned about that broader market risk-off event spoiling the party. So long as the broader market holds though, I do expect more outperformance to the upside by uranium miners. The nuclear news flow couldn't be more bullish long-term. So, I'm definitely super excited and bullish about this market long-term. But at the same time, I'm still concerned that the broader stock market will take the nuclear stuff down with it if it takes a big tumble and I think that tumble could be coming. If we get a reality check on how long this Iran conflict could take, not just to resolve the conflict with Iran, but for the energy system globally to return to normal after that. I think it's going to take longer than a lot of people think. Interesting part about uranium, Eric, is is that it is structurally being accumulated. It is making higher highs. It's crawling higher. But we haven't seen uh there a being a big burst higher that drives the uh momentum that attracts many traders to to compiling it back into this trade. And doesn't mean it won't happen. But right now, at this point, uranium is just quietly moving higher and the question is is that does that trigger some new bull run? Well, if the market stays relatively stable and the AI trade continues to be a focal point, um and there is lots of room for uranium to potentially catch a a bid here and and run a little bit as we move in towards May. Patrick, before we wrap up this week's podcast, let's hit that 10-year Treasury note chart. The correlation to crude oil continues as uh pressure on the upside of crude occurs then pushing yields higher. So, it will we see a crude oil breakout and if we do, uh does that push uh yields towards the 440, 450 on the upside is going to be the key to watch. Overall, I think we're heading in the second half of the year to lower rates like Luke Roman was suggesting, but on the short-term this correlation to oil is so evident and we'll see whether or not any bullish impulse here on the short-term of crude results in a higher yields on the short-term. Folks, if you enjoy Patrick's Chart Decks, you can get them every single day of the week with a free trial of Big Picture Trading. The details are on the last pages of the slide deck, or just go to bigpicturetrading.com. Patrick, tell them what they can expect to find in this week's research roundup. Well, in this week's research roundup, you will find the transcript for today's interview and the trade of the week chart book that we discussed here in the postgame, including a number of links to articles that we found interesting. You're going to find this link and so much more in this week's research roundup. So, that does it for this week's episode. We appreciate all the feedback and support we get from our listeners and we're always looking for suggestions on how we can make the program even better. Now, for those of our listeners that write or blog about the markets and would like to share that content with our listeners, send us an email at researchroundup@macrovoices.com and we will consider it for our weekly distributions. If you have not already, follow our main account on X @macrovoices for all the most recent updates and releases. You can also follow Eric on X @erikstownsend. That's Eric spelled with a K. You can also follow me @patrickceresna. On behalf of Eric Townsend and Patrick Ceresna, thank you for listening and we'll see you all next week. That concludes this edition of MacroVoices. [music] Be sure to tune in each week to hear feature interviews with the brightest minds in finance and macroeconomics. MacroVoices [music] is made possible by sponsorship from bigpicturetrading.com, the internet's premier source of online education for traders. Please visit bigpicturetrading.com [music] for more information. Please register your free account at macrovoices.com. Once registered, [music] you'll receive our free weekly research roundup email containing links to [music] supporting documents from our featured guests and the very best free financial content our volunteer research team could find on the internet each week. You'll also gain [music] access to our free listener discussion forums and research library. And the more registered [music] users we have, the more we'll be able to recruit high-profile feature interview guests for future programs. [music] So, please register your free account today at macrovoices.com if you haven't already. You can subscribe [music] to MacroVoices on iTunes to have MacroVoices automatically delivered to your mobile device each week free of charge. You can email questions for the program to mailbag@macrovoices.com and we'll answer your questions on the air from time to time in our mailbag segment. MacroVoices is presented [music] for informational and entertainment purposes only. The information presented on MacroVoices should not be construed as investment advice. Always consult a licensed investment professional before [music] making investment decisions. The views and opinions expressed on MacroVoices are those of the participants and do not necessarily reflect those of the show's hosts or sponsors. MacroVoices, >> [music] >> its producers, sponsors, and hosts, Eric Townsend and Patrick Ceresna, shall not be liable for losses resulting from investment decisions based on information or viewpoints presented on MacroVoices. MacroVoices is made possible by sponsorship [music] from bigpicturetrading.com and by funding from Fourth Turning Capital Management LLC. For more information, [music] visit macrovoices.com.
Trade of The Week – MacroVoices #529
Summary
Transcript
Now, back to your hosts, [music] Eric Townsend and Patrick Ceresna. Eric, it was great to have Ole back on the show. Now, listeners, you'll find the download link for this week's trade of the week in your research roundup email. If you don't have a research roundup email, it means you have not yet registered at macrovoices.com. Go to our homepage and look for the red button over Ole Hansen's picture saying looking for the downloads. Patrick, for this week's trade of the week, Ole contends that the market is underestimating how long this energy disruption is really going to last. The forward curve is already showing extreme backwardation, and Ole explained in the feature interview how that spells opportunity for investors. So, how do you position in crude oil with options farther out on the curve, assuming that you think Ole has the call right? As Ole highlighted, this is not simply a short-term geopolitical spike in oil, but a shift in the structural floor beneath the market. The acute tightness at the front end has created pronounced backwardation, but the more compelling opportunity sits further out in the curve, where deferred prices still appear underpriced relative to the likely duration of this disruption. So, rather than chasing front end volatility, the trade is about positioning in the deferred part of the curve to capture both a higher equilibrium price and that carry profile. Now, the most direct way to express that view would be through a long position in the deferred crude oil futures, but instead of taking outright futures risk, I want to introduce asymmetry into the structure, defining the downside while preserving meaningful upside convexity if the repricing higher unfolds. So, this week's trade of the week, I'm expressing the view through a bull call spread in WTI. While spot crude oil prices are trading around $94 at the time of this recording, this structure focuses on the December 2026 WTI contract currently trading near $77.40 with approximately 211 days to expiration. Using the corresponding November options with roughly 208 days to expiry, the trade begins by purchasing the deep in the money $70 call for approximately $11.70, of which $7.40 is intrinsic value. To offset the remaining time value premium, I'm selling the $90 call for roughly $4.40, creating a $20 wide call spread for a net debit of approximately $7.30. What makes this structure compelling is that the premium paid is a largely intrinsic value, resulting in break-even near $77.30, essentially in line with underlying futures price. In practical terms, that significantly reduces Vega exposure and minimizes time decay, effectively transforming the position into a defined risk high delta exposure with embedded convexity. Rather than paying heavily for optionality, you're primarily owning intrinsic value while financing the trade through the sale of the higher strike upside. From a payoff perspective, max loss is limited to the $7.30 debit with a max profit of $12.70 with almost no carry cost, creating a favorable asymmetric profile while maintaining exposure to the deferred curve. The objective is simple, use a capital-efficient bull call spread to express a higher structural floor in oil, capturing upside repricing with defined risk and reduced sensitivity to volatility. Patrick, every Monday at Big Picture Trading, your webinar explains how retail investors can put on our most recent trade of the week. For those listeners that want to explore how to put on these trades in greater detail, don't miss out on a 14-day free trial at bigpicturetrading.com. Now, let's dive into the post-game chart deck. All right, Eric, let's dive into these equity markets. Patrick, so far as I'm concerned, the ceasefire has mostly already collapsed just as I predicted that it would, but equities are shrugging off higher crude oil prices and continued to rally to new all-time closing highs on Wednesday, despite the fact that it's pretty darn clear that the Iran crisis isn't quite over yet, and frankly, I don't think it's anywhere close to over. So, as I explained when this all began, the usual wartime playbook starts with a big panic sell-off. Oh my gosh, there's a war on, sell everything. Then people calm down and remember that wars are always inflationary and usually good for the stock market, even if they're bad for humanity. In many ways, it feels like that's what's happening here. You know, the initial shock is over, we're used to this now. The stock market is rallying because obviously this means that there's going to be more spending on defense and buying more weapons and, you know, inflation factors and so forth. It seems like that's what's happening. The thing is, an energy delivery disruption that threatens to halt the global economy definitely is not bullish for equities. The market seems to be convinced, and the market's usually more right than I am, so maybe I'm wrong on this one, but the market seems convinced that this is all going to go back to normal soon enough, and the risk posed by the continued closure of the Strait of Hormuz isn't as big of a risk as was first feared. I disagree. I think it's a very big risk, and furthermore, I think that risk is growing exponentially with every day that this continues. So, my S&P hedges expired worthless on Friday, and I replaced them same day with a new put spread, 6,800 to 6,000 bear put spread on S&P futures. I don't think this is over yet, and you know, hey, if that too expires worthless and I give up all that premium as insurance cost, I would much rather have been wrong on that one, and I'll be delighted to watch those hedges expire worthless as well. Meanwhile, I'm happy to have downside protection in place because I think this is a long way from over, and I do think that the energy disruption as a result of the continued closure of the Strait of Hormuz is a big deal for the global economy and ultimately for the stock market. Now, to be clear, if I'm wrong about the geopolitics and it really does blow over in the sense of the strait really and truly reopening, traffic can flow without disruption, oil tankers just go about their merry business, then it really is over, and I think the stock market rallies considerably from there when it's over. I just don't think we're there yet. Well, Eric, I want to speak to the technical levels. First of all, we had an extraordinary 23-day April bull run on the upside that has the market trading at a pretty overbought level on the upside, up 13% in over those 23 days. We're trading along those 52-week highs. Now, what really drove this was a lot of systematic drivers. There was a huge flip back on the bull side by CTAs, vol targeting funds getting back in. So, we've seen vol normalization. We are seeing dealer gamma completely collapse, creating a van a tailwind to the upside of the market. So, there was a lot of structural buying. We're now at a level where much of that structural buying is now rearview mirror. I think in order for the market to make its next leg higher, it's going to have to be driven by earnings. So, what we saw was a substantial reversal of the prior 6-month sector rotation. The Mag 7s came out of the gate very strong. The QQQ went ripping higher. We saw a tech-driven advance on the upside of this market. So, with the fact that we have the earnings of five of the Mag 7s next week, they're going to determine whether or not there's another bullish impulse towards us a 7,400 on the upside of the market. Now, again, that is defining the the macro logic that you were referring to, but on the short term, liquidity and momentum may take this market higher. Overall, I think that once that exhausts itself going into May, we will we could see all sorts of potential reversal points, but at this stage, in order for us to have any serious technical damage, we would need to see over a 5% drop in this market at this point to really start reversing the flows that have really driven this market higher. So, while I'm not too optimistic about the asymmetry of the opportunity in terms of how much upside there is on the market, there also doesn't feel like the backdrop of an imminent market drop. So, it's one of these things where we have to respect the prevailing trend and see whether the earnings can give it that extra impulse to go another leg higher. All right, Eric, let's touch on this dollar. Patrick, we still have a big unfilled gap on the Dixie chart running up to 99 spot 38. That's from after the ceasefire was announced, and I expect that to get filled shortly after the third US aircraft carrier battle group arrives in the Gulf theater, which should happen around the end of this week. So, I think this weekend could be when the fighting resumes, but eventually, I think the dollar downtrend, and and that, by the way, coincides with Originally, Trump said he was going to extend the ceasefire kind of indefinitely and then he put a 3 to 5 day time limit on it. That's the amount of time it takes for the USS uh George H. W. Bush to circumnavigate the continent of Africa. They didn't go through the Red Sea and the Suez Canal, I think because they were afraid of being targeted by the Houthis. So, they had to go the long way around Africa. That's going to take 3 to 5 days to get there. Let's coincidentally enough the ceasefire that Trump gave gave an extension to just happens to coincide with when the uh carrier Bush will arrive in the combat theater. I don't think that's a coincidence. Well, the dollar index has turned up and it's really being driven by the last few days of weakness in the euro. And to me, I want to continue to focus on that euro chart. The euro failed along the 118 level and that to me remains a very critical line in the sand. If the current environment in Europe will inevitably lead to some sort of economic weakness because of the uh geopolitical and uh macroeconomic backdrop, uh then a euro uh breaking down would almost certainly be the bullish tailwind that the dollar index would need to go higher. Will we see the euro weaken back toward 115 is the thing on my radar. All right, Eric, let's just touch on crude oil. Well, once again, I question whether macro traders understand the lag effects in the physical delivery of crude oil. JP Morgan says that Iran can only withstand about two more weeks of having its crude oil exports blockaded by the United States. Now, it's not quite the same thing as the Hormuz closure. It's the US stopping Iran's exports. If that US blockade continues to be successful for more than about two more weeks, Iran will be forced to begin shutting in its oil production and after about one more month, Iran would be forced to substantially shut in most if not all of its oil production because of a lack of any place to store the oil. Once shut in, those wells take a long time and cost a lot of money in order to bring back online. That means it's plausible that the US could resort in a worst case if they can't succeed militarily on other fronts, they could get into a wait them out game where they say, "Okay, we're going to you know, wait out Iran, force them to close in their wells which creates an economic collapse for Iran so they don't have to target civilian infrastructure with military strikes, which I hope for the sake of innocent civilians they won't resort to doing." So, the length of time that the global energy supply could be affected by all this increases exponentially from here. And the reason I say exponentially is if you get to the point where Iran and other countries are forced to shut in their oil production. Let's say we go two more weeks and there's a bunch of shut-ins. It doesn't mean that it extends the disruption for two more weeks. It extends it for the two weeks that it takes until that happens and however long it takes after they shut in that production to bring it back online, which could be months. So, two more weeks of this could result in two or three more months of disruption of supply to the global economy, higher oil prices, stagnant economic activity, decreased profits could be really bad news for equity markets and everything else. So, it's important to understand if it goes on a few more weeks, it could be a few more months in terms of the resultant effect. And again, many other producing countries, not just Iran, would be forced to close in their wells. So, if the US has to resort to waiting out Iran closing in its wells as a way to end this conflict without having to target civilian infrastructure, well, the consequence is going to be everybody else closes in their production. That means we could have 6 to 12 months of dramatically elevated energy prices globally, completely screwing up the entire global economy. So, I say this is a bigger deal than most traders seem to be predicting. I could be wrong and frankly, I hope to be wrong on this one. Well, Eric, we have crude oil continuing to trade above its 50-day moving average and found some critical support along retracement zones. So, overall, while it was a deep pullback, it could have just been because oil was overshot on the upside and uh a few tweets were able to create this mean reverting correction. But as the backdrop we've talked about is there, it will be interesting to see whether crude oil can muster up another bull advance back up towards its highs. The particular thing that I wanted to touch on though that's more interesting is the fact that the pullback in RBOB gasoline was nowhere near as deep as WTI. And while this uh you know, multi-week correction on gasoline came down to the 290 level, we're back up to 52-week highs on gasoline. It'll be really interesting to see whether we have a fresh new breakout on gasoline futures and whether that's a leading indicator to the fact that crude oil still has some more upside ahead of it. All right, Eric, let's move on and discuss these precious metals markets. Patrick, I remain convinced that we're ultimately headed to new all-time highs in gold. But uh you know what? Tactically, I'm getting pretty darn nervous about this chart. It's looking more and more to me like lower highs and lower lows. It's developing a pattern here. And if I'm right about oil price induced inflation lasting longer than most people expect, well, that's going to be a longer headwind and a bigger, stronger headwind than is currently priced into the market for gold. I see 4685. That's the 38.2% Fibonacci retracement as a critical level. A close below that suggests much more downside is possible and maybe even new cycle lows below 4100 could be in the cards. Now, to be clear, when the Iran conflict really and truly is over and the global energy system begins to return to normal, I think gold will rally and rally hard to new all-time highs. But that could be quite a ways off the way things are going. So, I'm kind of waiting to see what happens at 4685. We touched that level. It looked like we're about to trade down through it and then Trump extended the ceasefire for At that point, it sounded like indefinitely. Now, it's scoped down to 3 to 5 days. Let's see if we can hold above 4685. If not, I start to get really worried about where we're headed next. Well, Eric, I have similar concerns about gold. So far, the entire rally that's lasted throughout April has barely tested the 50-day moving average and a fib retracement zone and it seems very heavy like it's rolling over. The thing about gold is is that uh that we're seeing the exact same pattern on silver, platinum, and palladium. So, in including the gold miners themselves. So, what we had was clearly some sort of a topping formation and maybe there's still a little bit more more correcting to go. I remain quite bullish long-term gold. The question here is will the second quarter of the year be much more consolidation that creates the next compelling buying opportunity uh for a potential second half of the year rally. All right, Eric, let's have this conversation about uranium cuz it's been a relatively quiet for the last month. Well, we're seeing a nice brisk recovery in uranium miners and the stochastics and RSI on the weekly charts suggest that there's more room left to go even higher. So, as long as the broad market risk-off event doesn't spoil that party, I think the chart looks really bullish. The thing is I'm as I said earlier, kind of concerned about that broader market risk-off event spoiling the party. So long as the broader market holds though, I do expect more outperformance to the upside by uranium miners. The nuclear news flow couldn't be more bullish long-term. So, I'm definitely super excited and bullish about this market long-term. But at the same time, I'm still concerned that the broader stock market will take the nuclear stuff down with it if it takes a big tumble and I think that tumble could be coming. If we get a reality check on how long this Iran conflict could take, not just to resolve the conflict with Iran, but for the energy system globally to return to normal after that. I think it's going to take longer than a lot of people think. Interesting part about uranium, Eric, is is that it is structurally being accumulated. It is making higher highs. It's crawling higher. But we haven't seen uh there a being a big burst higher that drives the uh momentum that attracts many traders to to compiling it back into this trade. And doesn't mean it won't happen. But right now, at this point, uranium is just quietly moving higher and the question is is that does that trigger some new bull run? Well, if the market stays relatively stable and the AI trade continues to be a focal point, um and there is lots of room for uranium to potentially catch a a bid here and and run a little bit as we move in towards May. Patrick, before we wrap up this week's podcast, let's hit that 10-year Treasury note chart. The correlation to crude oil continues as uh pressure on the upside of crude occurs then pushing yields higher. So, it will we see a crude oil breakout and if we do, uh does that push uh yields towards the 440, 450 on the upside is going to be the key to watch. Overall, I think we're heading in the second half of the year to lower rates like Luke Roman was suggesting, but on the short-term this correlation to oil is so evident and we'll see whether or not any bullish impulse here on the short-term of crude results in a higher yields on the short-term. Folks, if you enjoy Patrick's Chart Decks, you can get them every single day of the week with a free trial of Big Picture Trading. The details are on the last pages of the slide deck, or just go to bigpicturetrading.com. Patrick, tell them what they can expect to find in this week's research roundup. Well, in this week's research roundup, you will find the transcript for today's interview and the trade of the week chart book that we discussed here in the postgame, including a number of links to articles that we found interesting. You're going to find this link and so much more in this week's research roundup. So, that does it for this week's episode. We appreciate all the feedback and support we get from our listeners and we're always looking for suggestions on how we can make the program even better. Now, for those of our listeners that write or blog about the markets and would like to share that content with our listeners, send us an email at researchroundup@macrovoices.com and we will consider it for our weekly distributions. If you have not already, follow our main account on X @macrovoices for all the most recent updates and releases. You can also follow Eric on X @erikstownsend. That's Eric spelled with a K. You can also follow me @patrickceresna. On behalf of Eric Townsend and Patrick Ceresna, thank you for listening and we'll see you all next week. That concludes this edition of MacroVoices. [music] Be sure to tune in each week to hear feature interviews with the brightest minds in finance and macroeconomics. MacroVoices [music] is made possible by sponsorship from bigpicturetrading.com, the internet's premier source of online education for traders. Please visit bigpicturetrading.com [music] for more information. Please register your free account at macrovoices.com. Once registered, [music] you'll receive our free weekly research roundup email containing links to [music] supporting documents from our featured guests and the very best free financial content our volunteer research team could find on the internet each week. You'll also gain [music] access to our free listener discussion forums and research library. And the more registered [music] users we have, the more we'll be able to recruit high-profile feature interview guests for future programs. [music] So, please register your free account today at macrovoices.com if you haven't already. You can subscribe [music] to MacroVoices on iTunes to have MacroVoices automatically delivered to your mobile device each week free of charge. You can email questions for the program to mailbag@macrovoices.com and we'll answer your questions on the air from time to time in our mailbag segment. MacroVoices is presented [music] for informational and entertainment purposes only. The information presented on MacroVoices should not be construed as investment advice. Always consult a licensed investment professional before [music] making investment decisions. The views and opinions expressed on MacroVoices are those of the participants and do not necessarily reflect those of the show's hosts or sponsors. MacroVoices, >> [music] >> its producers, sponsors, and hosts, Eric Townsend and Patrick Ceresna, shall not be liable for losses resulting from investment decisions based on information or viewpoints presented on MacroVoices. MacroVoices is made possible by sponsorship [music] from bigpicturetrading.com and by funding from Fourth Turning Capital Management LLC. For more information, [music] visit macrovoices.com.