1. The Strait of Hormuz: 20% of Global Oil Supply Is Now a Question Mark
As I write this, WTI is at $78 and Brent is at $84.
The U.S.-Israel-Iran war has halted shipping through the Strait of Hormuz, where roughly 20% of the world’s oil supply flows. Don’t forget, this is a major global energy choke point.
I am already seeing $100-$150 oil scenarios being thrown around if this drags on into spring. Don’t forget, at $100-$150 oil, we will be feeling it at the pump big time. I am already paying anywhere 20-30% more at gas station.
Looking at the charts: there’s a very clear break in a downtrend that began in 2022. Next level to watch on WTI is $82, and if that breaks, we will be looking at $90-$100 range quickly.
2. Precious Metals & Other Metals– What Charts Are Telling Us
Gold: after that big day on March 3rd, there wasn’t much follow-through. Gold chart is still not broken. But momentum is losing here.
Silver: Silver had a second consecutive day close below the 50-day moving average. Also, momentum seems to be losing chat here for now. Watch the bottom of the range – around $75-$70…, if it gets there.
Copper: Below its 50-day moving average.
Zinc, tin, and nickel remain choppy. Aluminum is the only one in that bunch that’s surprisingly holding well.
With metals and commodities (ex-oil), the big story was lower dollar.
3. The S&P 500 And Fear
The S&P 500 closed once again below the 50-day moving average, and remains below it. If you follow chart, this means near-term trend continues to point lower. 6,800 is a big level to watch if we go down there.
Market is mixed about all that’s happening, and buy the dip crowd is strong.
However, keep a watch on the VIX – we are constantly above 20. This is essentially saying market has some sort of fever. If we start getting into 30 range, watch for some serious selling.
4. Jobs cuts, Yields, & More
The February Challenger report is a small bright spot — job cuts plunged from January’s alarming pace. Sadly thought, hiring plans fell 56% on the month.
Oh, have you been looking at the yield on US10Ys? Have you also looked at the 10y-2y spread? Something interesting happening in the bonds market. It could really give a blow to the market. Lets see.
Bitcoin testing $71k, but isn’t able to sustain. Now to the bottom of the range – around $65k?
US dollar index (DXY) wants to go higher.
5. BlackRock Just Wrote Another Private Loan From 100 to Zero — This Is the Story Nobody Is Watching
BlackRock just marked a ~$25 million loan to Infinite Commerce Holdings — an Amazon product aggregator — from 100 cents on the dollar to zero. Three months ago it was fully valued. This is the second time in three months BlackRock‘s private credit division has done this — the first was Renovo Home Partners back in November.
Two loans. Both at par. Both wiped out.
Private credit is around $1.7 trillion market that prices itself essentially — there are no daily marks, no “level 2,” not much transparency. When a loan goes from 100 to zero overnight, it doesn’t mean it was fine yesterday. It means the problem was already there and nobody was looking.
This is what swimming naked looks like. The question isn’t whether there are more of these things, it is very possible there are. The question is how many, and how big. Keep watching this one closely.