Fuel Prices, Now And Then

My wife told me she joined the 7-Eleven gas program, and she got 23 cents off per gallon when she filled up the car. To tell the truth, I don't drive my car very much. I live 10 blocks from the grocery store and just under 1 mile from downtown Delray Beach. In 2020, I remember some gas stations were selling regular gas for $1.61 to $1.75 a gallon but that's not the story today. I think we all know the U.S.-Iranian war has pushed prices back up to levels not seen since September 2022. Below are some of the reasons prices increased back then.

Pre-February 2026 Reasons for Higher Fuel Prices

1. COVID-19 Lockdowns Ended (2020–2021): During the pandemic, people stopped commuting, flying, and traveling. Gasoline demand collapsed. As businesses reopened and Americans started driving again, demand recovered rapidly, pushing prices higher.

2. OPEC and Russia Cut Oil Production (2020–2021): In April 2020, OPEC+ agreed to slash production by a record 9.7 million barrels per day. These cuts helped stabilize oil prices, but the subsequent recovery in demand outpaced the return of supply.

3. U.S. Refinery Capacity Declined (2020–2022): Some refineries closed or were converted to other uses during the pandemic. When gasoline consumption recovered, fewer refineries were available to process crude oil into gasoline.

4. Russia Invaded Ukraine (February 2022): The invasion disrupted global oil markets, raised concerns about Russian petroleum supplies, and pushed crude oil and gasoline prices sharply higher.

5. Inflation and Higher Operating Costs: Increased labor, transportation, and operating costs contributed to higher gasoline prices, although crude oil supply and demand were much more important drivers of the surge.

It seems to me that the energy sector is already pricing in the possibility of President Trump launching a major military attack on Iran after the November 3 midterm elections, with U.S. and Israeli officials reportedly discussing a possible three-day bombing campaign targeting nuclear facilities, missile systems, drone operations, and energy infrastructure. Potential targets reportedly include Iran’s underground Pickaxe Mountain nuclear facility, while military planners have also considered using powerful conventional bombs. Trump acknowledged on October 23 that another operation was possible, but no final authorization or strike date has been announced. A new attack could send crude oil prices sharply higher, trigger risk-off selling in the $ES and $NQ, and increase volatility in Treasury futures as investors weigh safe-haven demand against rising inflation risks.

I know the graph above only shows Florida gasoline and Lower Atlantic diesel prices, but it's not just fuel prices. It's everything, and to be honest, and I don't think things are going to get better anytime soon.

Who Gets Hurt the Most?

1. Low-income families: They spend a larger percentage of their income on necessities like groceries, rent, utilities, and transportation. They have little financial cushion when prices rise.

2. Middle-class Americans: Higher costs for mortgages, car payments, insurance, food, and energy reduce disposable income and make it harder to save.

3. Retirees and seniors: People living on Social Security, pensions, or fixed retirement income can lose purchasing power. Social Security receives annual cost-of-living adjustments, but those increases may not fully reflect an individual's expenses.

4. Working families: If wages increase 3% while inflation rises 4%, workers experience a decline in real purchasing power despite receiving a raise.

5. Renters and first-time homebuyers: Rising rents, home prices, insurance costs, and mortgage rates make housing less affordable. Inflation can also complicate the Federal Reserve's ability to lower interest rates.

6. Small-business owners: Higher costs for labor, inventory, transportation, insurance, and borrowing squeeze profit margins, particularly when customers resist price increases.

7. People with savings: Inflation erodes the purchasing power of cash and savings accounts when their interest earnings fail to keep pace with rising prices.

Who can benefit from inflation?

People who own appreciating assets, such as real estate or certain stocks, may benefit when asset values rise. Borrowers with long-term, fixed-rate debt can also benefit because inflation reduces the real value of what they owe, provided their incomes keep up.

The biggest problem for the American public:

Inflation slowing does not mean prices are falling. If inflation drops from 9% to 3%, prices are generally still increasing, just at a slower pace. The cumulative increases from previous years remain.

For example, an item that cost $100 in 2020 and experienced 25% cumulative inflation would cost $125 today. Even if inflation falls to 2%, the price doesn't return to $100.

Bottom line: Inflation acts like a hidden tax on purchasing power, disproportionately affecting Americans who spend most of their income on necessities and have the least ability to absorb higher costs.

Midterm Elections: 8 Days And Counting 'The Good, The Bad and The UGLY' Trump's Approval Rating — October 25, 2026

According to the latest RealClearPolling average:

As of today, there are eight calendar days remaining until the U.S. midterm elections on Tuesday, November 3. Like it or not, I think there is a sea change coming. If the stats are correct, market volatility should fall a few days before the midterms, but Friday is the last trading day of October and the week 5 opex.

Missed last night’s Trey Talk? Watch Trey’s look ahead at the coming trading week.

Goldman Sachs: Investor Scrutiny of AI Stocks Is Growing

Rich Privorotsky on The Markets

In a separate story out of Goldman Sachs:

Hedge Funds Are Shorting Stocks at Near Five-Year Highs — Is a Major Short Squeeze Coming?

According to Bloomberg, hedge funds are aggressively betting against stocks, with short sales outpacing new long purchases across global equities by approximately 5 to 1 during October. Goldman Sachs reported that short leverage on its prime brokerage books has reached the 99th percentile of the past five years, meaning bearish positioning is approaching historically extreme levels. At the same time, net leverage among fundamental long/short hedge funds has fallen near a three-year low, suggesting investors are reducing their exposure to rising stock prices while maintaining substantial overall trading positions.

Technology stocks have been particularly hard hit, with the two weeks ending October 16 marking the largest net selling of global information technology shares in more than a decade of Goldman data. Hedge funds have also suffered significant losses, with global fundamental long/short funds declining 2.9% during the week ending October 15, while Asia-focused stock pickers lost 6.8% during the first half of October. Rising interest rates, higher energy prices, inflation concerns, and uncertainty surrounding artificial intelligence investments have all contributed to the defensive positioning.

Here is where things get interesting. When hedge funds sell stocks short, they borrow shares, sell them into the market, and hope to buy them back later at lower prices. But if stocks begin rising instead, those short positions start losing money. As losses increase, prime brokers may demand additional margin, risk managers may order positions reduced, and stop-loss or automated risk controls may trigger buying. To close a short position, the fund must purchase shares in the market and return them to the lender. That buying can push prices higher, forcing additional short sellers to cover and creating a self-reinforcing cycle of rising prices, increasing losses, and further short covering. The more concentrated and leveraged the short positions, the greater the potential for this feedback loop to accelerate.

There is another important distinction. Goldman's 5-to-1 ratio measures short-selling activity relative to long purchases, not the number of outstanding short positions or the percentage of shares sold short. Likewise, the 99th-percentile leverage reading reflects positioning among Goldman's prime brokerage clients, not the entire stock market. Extreme positioning increases the potential for forced buying, but it does not establish how much buying would be required or guarantee that a squeeze will occur. Some short positions are hedges against existing long holdings, and many funds can maintain those positions even as stocks rally.

For the ES and NQ, this is particularly important following the recent selloff. If heavily shorted technology stocks begin rallying on stronger earnings, a favorable Fed announcement, or easing inflation concerns, funds could start covering their shorts. That buying could lift the underlying stocks and their index weights, pushing the ES and especially the technology-heavy NQ higher. As futures rise, traders short the indexes may also cover, adding another source of demand. However, short covering by itself does not guarantee a sustainable recovery. Once those positions are closed, the forced buying disappears, and the market still needs genuine investment demand to support higher prices.

The bottom line: With hedge fund short leverage near five-year extremes, the market may be vulnerable to a sharp, fast-moving rally if a positive catalyst forces bearish investors to reduce risk. But there is a major difference between a short-covering rally and the start of a new bull-market advance. With the Federal Reserve meeting, major technology earnings, inflation reports, and midterm elections approaching, the question isn't just whether the ES and NQ can bounce. It's whether short covering turns into sustained buying—or whether the rally runs out of fuel once the shorts have been squeezed.

Globex: The Early Lift Gives Way

Friday’s ES session began at 7706.25 and reached 7714.25 during the 6:20 p.m. ET interval Thursday evening. That early high did not hold. By the final five minutes before Friday’s cash open, ES had traded down to 7660.00, leaving a 54.25-point retreat from the overnight peak.

The overnight session ended at 7661.00, down 45.25 points from its opening price. Buyers were heading into the cash session near the bottom of the overnight range, with Thursday’s 7704.50 settlement well overhead. The early lift had given way to a lower opening backdrop, and the cash market would have to show whether it could recover any meaningful part of that decline.

Cash Trade: A Rebound That Would Not Stick

ES opened cash trade at 7661.25. The morning remained two-sided: after trading into the 7670s, it reached the day’s 7648.50 low during the 10:25 a.m. interval. Buyers then produced a 48.75-point rebound to 7697.25 during the 11:30 interval. That was the cash-session high, but it still fell short of Thursday’s settlement.

The recovery did not survive the afternoon. ES was back around 7676.00 at 1:00 p.m. and 7668.00 at 3:00 p.m. At 3:50, it stood at 7664.75. The MOC Reveal showed $2.3 billion to sell, narrowing substantially before the final snapshot turned modestly to buy. ES finished the cash session at 7660.75, just half a point below its cash opening price, after traveling through a 48.75-point intraday range.

There was a small recovery after the bell. ES ended the futures session at 7672.50. Official settlement was 7659.75, down 44.75 points, or 0.58%, from Thursday. Full-session volume totaled approximately 1.74 million.

NQ held up better on a settlement basis. It ranged from 28987.00 to 29326.00, finished cash trade at 29122.25, and ended the futures session at 29175.00. Its official settlement of 29117.75 was down 24.25 points, or 0.08%. For ES, the central story was a strong morning rebound that failed to stick: the later recovery still left the session below Thursday’s settlement.

A Heavy Sell Reveal Gives Way to a Modest Buy Finish

Friday, October 23, opened the MOC Reveal with $2.3 billion to sell: $1.9 billion in buy interest against $4.2 billion in sell interest. The S&P 500 accounted for $2.2 billion of the net selling, while Nasdaq showed $1.4 billion to sell and NYSE $0.9 billion to sell. Historical ranking is not yet established.

The imbalance stayed sell-heavy through the early updates. Net selling eased to $1.9 billion, returned to $2.1 billion, then narrowed to $1.0 billion at 3:55 p.m. By 3:58, the remaining sell imbalance was $0.3 billion. Selling briefly rebuilt at 3:59 before the final snapshot flipped to $0.1 billion to buy.

The largest late buy-side addition came at 3:55, when gross buy interest increased about $0.4 billion. The next notable sell-side addition was roughly $0.2 billion into 3:59. Declining unmatched balances alone do not establish a change in conviction; ordinary auction pairing can reduce both sides.

At the selected Reveal snapshot, Walmart led the displayed buys at $132.9 million. Apple led the displayed sells at $122.0 million. Technology carried approximately $1.0 billion of net selling; financials and health care also leaned lower, while consumer discretionary and staples were net buyers.

The closing dollar flip did not erase the earlier sell pressure or establish uniformly positive participation. The 3:55-to-close window often includes discretionary traders closing their day, but this dashboard does not identify who placed the orders or prove why they acted.

How the NYSE and Nasdaq auctions work

How to read the MIM

Manny Payano — The Market Open

Join Manny Payano in The Pit on Monday, October 26, at 9:15 a.m. ET for The Market Open.

Don't trade the open alone. Join us live in The Pit for free, follow the conversation, and bring your questions.

Economic Calendar

Earnings Calendar

Polaris Trading Group

Polaris Trading Group’s Friday, October 23 discussion moved from an overnight downside objective to selective intraday opportunities. David repeatedly returned to pattern quality, confirmation and capital preservation. The room discussed both long and short ideas, with follow-up posts showing how an early long developed, how its runner was managed and where a later short setup appeared. Those updates were individual room observations, rather than an audited record of every entry, fill or result.

Overnight setup and the opening framework

• David’s opening assessment was risk-off, with the overnight move already reaching the 7675 downside target referenced in the October 23 daily strategy. That established the starting context for the room; it did not mean every subsequent trade had to follow the overnight direction.

• An early D-Level long remained in play. The conversation therefore distinguished the broader downside backdrop from a specific responsive trade. The useful question was whether a recognizable setup was present at the current location, rather than whether the overnight objective had already been reached.

Morning conditions and patience

• David subsequently described conditions as muddy and advised keeping powder dry until a cleaner pattern emerged. Standing aside was part of the plan when the available structure did not support a clear decision.

• The room’s discussion reflected that tension: traders were watching for opportunities, but the lead guidance did not call for constant participation. An earlier directional move or a nearby reference was insufficient on its own to remove the need for confirmation.

What qualified as a short setup

• When David asked what conditions were needed for a short, a participant cited an ATR10 flip, an ATR4 pullback and the slope of the 89 reference. Those were the criteria discussed in that exchange, rather than a blanket instruction to sell every rebound.

• A later participant reported taking a short without an ATR10 flip. David specifically challenged the missing condition. The exchange made the difference between anticipating a setup and following the stated checklist concrete, without establishing that the trade necessarily had to win or lose.

The long opportunity and its follow-through

• David later described a backtest of the prior low as a touch-and-go long, with the A10 holding and triggering. The linked chart supported the discussion of that specific intraday opportunity.

• Follow-up posts moved into scaling and runner management. The room did not simply leave the initial idea hanging: later updates showed the stop trail being raised and subsequently elected.

Execution and protecting the runner

• The long discussion emphasized managing an open position as conditions developed. Taking partial exposure off and moving a trailing stop were separate decisions from the original entry signal.

• Another participant referred to a stop at POC.

Technical references for the next decision

• David’s later framework was conditional: clearing and holding the HVN would favor higher prices, while a failure to clear and confirm could allow a pullback. The posts did not establish a numerical HVN level for that statement.

• An afternoon A10 short appeared in a subsequent chart. The available follow-up did not establish a completed exit or final outcome for that short.

Other markets and indicator questions

• The room also shared a crude-oil opening-range breakout chart.

• Questions about D-Level Money Box tools led to clarification and indicator resources. Historical response-rate claims also appeared in member discussion, but the sample definitions and calculations were not independently verified here; they are not presented as established performance statistics.

Friday’s practical lesson

• Capital preservation tied the day together: wait when conditions are unclear, require the intended pattern and distinguish a trade idea from its execution. David’s correction of the missing short criterion was especially relevant to that discipline.

• The most useful progression was from context, to confirmation, to active management. Friday provided examples of each, while leaving some later outcomes unresolved. That makes the review a record of the room’s decision process rather than a claim that every discussed opportunity produced a result.

DTG Room Preview

The DTG group’s Monday, October 26 preview favors a cautious risk-on backdrop, while emphasizing that energy headlines and central-bank guidance could reverse that tone. Its tactical view remains conditional after Friday’s ES decline.

Market Backdrop

• The group sees softer oil and Treasury yields as potentially supportive for equities, while treating Middle East developments as a continuing reversal risk.

• Its focus is whether the oil-led risk bid persists and whether AI-related earnings distinguish well-funded leaders from more speculative infrastructure plays.

ES References

• The group describes the ES as trading below its 50-day moving average at 7761.50, with that average acting as loose resistance.

• Potential trendline resistance zones are 7724–7729, 7895–7900, 7955–7960 and 8039–8044. The listed trendline support zone is 7419–7424.

• The September 16 low at 7575 remains a downside reference in the group’s plan. These are the group’s technical levels, distinct from the BTS calculations above.

Tactical Watch

• The group reports a bullish large-trader bias on light overnight participation. That is an attributed room assessment, not an independently verified measure.

• Watch whether ES establishes a new swing low and whether lower oil can sustain an equity bid. The supplied charts show the broader trendline and daily-profile context.