Oil Still Could Crack the Case

As a fiery debate rages across many asset classes regarding whether or not inflation is reaccelerating, crude oil may be the key piece of the puzzle which determines the outcome this summer. 

On the updated USO ETF daily chart, below, you can see the technical crossroads crude is faced with--A full month now of flopping and chopping around after a pullback in April.

Oil bears expect more downside which should substantially ease inflationary pressures and give The Fed ample room to finally cut, with some in that group expecting a jubilant soft landing while others look to a deep economic deflationary downturn. On the other side of the tape there are inflationistas who expect oil to turn back higher and force The Fed to reluctantly tighten amid renewed inflationary pressures. 

Either way, this USO chart could easily tip the scales. 

With a potentially bullish inverse head and shoulders bottom (outlined) still in play, this morning's gap up in oil dovetails the sharp move higher in silver for an inflationary one-two punch off the long, holiday weekend. 

I look at the $77/$78 zone just above as being the key initial hurdle for USO to clear to get the momentum moving in favor of oil bulls. 

Elsewhere, GME and NVDA are finding hot money action this morning. Alongside silver, this does not seem like "restrictive" atmosphere whatsoever, and that goes about triple when we view home price data nationwide. 

All that is missing now is another move higher in rates on the 10-Year Note, which I continue to expect, as well.