Cheaper Oil Into the Xi Summit

Bessent came out of the China talks calling them very successful. The Treasury Secretary and Vice Premier He Lifeng put a US-China AI dialogue on the table in New York for Trump and Xi, who meet at the White House Thursday with the tariff truce running out November 10. Oil is lower a fourth day, Brent near $102 and WTI under $100. SPX closed 7,650.50 Friday, a touch higher on quad witching. Premarket 7,700, up 50.

On Saturday the Houthis hit Riyadh and the Aramco terminal at Yanbu, the western end of the East-West pipeline whose outage on September 11 started this leg in crude, and oil fell anyway. Saudi exports are back over 4 million barrels a day this month from about 2.4 million in August, and they got there by pushing more through Hormuz, the strait that started the war. The ten-year closed Friday back at 5%, and two Fed presidents spent the weekend saying oil was never the whole problem. Kashkari said inflation is too high even with energy stripped out, and Goolsbee said this morning that if demand overheats there's no ambiguity about the response. The tape's paying for cheaper crude while the Fed says crude was never why it hiked.

Premarket is sitting right on the call wall at 7,700, the biggest node on the profile, with prior demand 7,698 under it. The five strikes from 7,705 to 7,725 carry twice the wall's gamma between them, so a push through 7,700 gets pulled into that shelf, and it only thins out past 7,730 at prior demand 7,735. Below is the thinnest downside of this run. The flip is 7,630 with prior demand 7,631 and the 8-day on it, the put wall at 7,625 is a quarter of Friday's, and every negative from there to 7,450 adds up to under a tenth of the positive gamma overhead.

The lean is long, from a pullback and not the open. The buy is 7,681, prior demand with size behind it, for 7,713 and 7,725. Through 7,713 the shelf does the work to 7,735, and that is where to sell. A close under 7,631 takes the flip and the put wall in one move, and the next stop is the 50-day at 7,617.