🐺OIL TO $100? HERE'S OUR BEAR CASE....

The real bear case for this war isn’t the U.S. launching missiles at Iran.

That scenario? Already 60% priced in, if you believe Polymarket odds.

Wild, but here we are.

Every dip during this escalation has been bought. We haven’t even broken the 20-day moving average on $SPX. It’s going to take a major surprise to change that. And if we do get one, it won’t be missiles… it’ll be oil infrastructure.

Because that’s the real risk.

OIL HITS MARKETS WHERE IT HURTS

The market's been riding the structural disinflation trend since 2022 highs.
A direct hit on oil refineries would shatter that calm.

Middle East conflict alone isn’t enough to derail the rally… but attacks on refineries? That injects new inflation risk into the system. And while that’s good for oil bulls, it’s not good for stocks, bonds, or the Fed’s easing path.

Before we dive deeper, let’s anchor with data… Prospero.ai’s short- and long-term readings are currently not favoring bulls. If oil had a clean breakout setup, we’d see it reflected in Prospero’s dashboards across energy names.

ENERGY, INFLATION, AND THE FED

Energy doesn’t flow directly into CPI… but it affects everything else.
Higher oil = higher production costs = higher prices across the board:

• Housing

• Services

• Consumer goods

• Transportation

• And yes, inflation expectations

If CPI picks back up, the Fed has a problem.
They’re still guiding for four cuts over the next two years. But inflation surprises could throw that off track… and end the rate cut cycle. If rate cut expectations stall out, so could this market.

“Don’t fight the Fed” still holds true.
When the Fed is easing, the market rides with it.
If that changes, we have to adapt.

HOW WE’RE PLAYING THIS

Here at the WOLF Report, we stay tactical.
Yes, we’re long the market. That hasn’t changed.
But we also take swings when the setup is there.

And right now, crypto is giving us that swing.

Here are our thoughts for our premium subscribers…

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