Trump announced a deal giving the U.S. majority control of 65 billion barrels of Venezuelan oil. Posted it on social media. No press conference. No cabinet briefing. Just a post.
The technical setup remains unchanged. Support held at the 200-day moving average for three consecutive months. RSI sits at 48. MACD crossed bullish two weeks ago then immediately uncrossed. Volume declined 12% since the announcement. None of this matters because oil reserves in the ground do not alter the chart pattern of SPY.
Retail traders will now spend the weekend calculating what 65 billion barrels means for their Robinhood portfolios. They will multiply big numbers by other big numbers. They will arrive at conclusions. They will open eleven new positions Monday morning in oil ETFs they cannot pronounce. They will lose money by Tuesday.
Venezuela has the largest proven oil reserves on Earth and the economy of a failed lemonade stand. Adding American management to unlimited oil sounds transformative until you remember that transformative deals get announced on social media approximately twice per quarter and the S&P just trades in the same 8% range it has occupied since April.
The geopolitical implications are staggering. The economic ramifications are profound. The technical indicators are neutral. The chart looks exactly like it did yesterday. It will look exactly like this tomorrow. Some kid in Wisconsin just bought OXY calls because he thinks Warren Buffett and Donald Trump are now teammates.
Sixty-five billion barrels divided by global daily consumption equals roughly 730 days of supply if you pretend extraction costs nothing and occurs instantly. It does not occur instantly. The chart does not care. The 50-day moving average crossed below the 100-day in July and nothing happened. It will cross back above in September and nothing will happen again.
Your technical levels remain 4200 support and 4600 resistance until they do not.
Photo by Jorge Brito on Unsplash
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