Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Stock Market Coronavirus Deviation from Overall Outlook for 2020 - Video - 28th Feb 20
Stock Market SPX to Rise back to 3350 - 28th Feb 20
Stock Performance in the Rising Coronavirus Fever - 28th Feb 20
Stock Market SPY Breaks Below Fibonacci Bearish Trigger Level - 28th Feb 20
Will CoronaVirus Pandemic Trigger Stocks Bear Market 2020? - 28th Feb 20
Dow Long-term Trend Analysis - Coronavirus Triggering a Stocks Bear Market? - 27th Feb 20
Trump or Sanders? Both will pile up the Debt - 27th Feb 20
Oil Price Is Now More Volatile Than Bitcoin - 27th Feb 20
A Digital “Fedcoin” May Be Coming… And It Would Be Terrifying - 27th Feb 20
India's Nifty 50 Stocks: Does the Bad Jobs Outlook Spell Trouble for Stocks? - 27th Feb 20
How Crypto Currencies Are Helping Players Go Private - 27th Feb 20 -
Gold and Silver The Die Is Cast - 27th Feb 20
US Economy Permanently Addicted to Zero Interest Rates - 27th Feb 20
Has the Stock Market Waterfall Event Started Or A Buying Opportunity? - 27th Feb 20
Advantages of Enrolling in a Retirement Plan - 27th Feb 20 - LS
South Korea Coronavirus Outbreak Data Analysis Warning Rate of Infection is Exponential! - 26th Feb 20
Gold Price Long-term Trend Analysis Forecast 2020 - 26th Feb 20
Fake Markets Are on Collision Course with Reality - 26th Feb 20
Microsoft is Crushing the S&P 500, Secret Trait Of Stocks That Soar 1,000%+ - 26th Feb 20
Europe's Best Ski Resorts For The Ultimate Adventure - 26th Feb 20
Samsung Galaxy S20+ vs Galaxy S10+ Which One to Buy? - 26th Feb 20
Gold Is Taking on $1,700 amid Rising Coronavirus Fears - 26th Feb 20
Is This What Falling Through the Floor Looks Like in Stocks? - 26th Feb 20
Gold Minsky Moment Coming - 26th Feb 20
Why Every Student Should Study Economics - 26th Feb 20
Stock Market Correction Over? - 26th Feb 20
US Bond Market Yield Curve Patterns – What To Expect In 2020 - 25th Feb 20
Has Stock Market Waterfall Event Started Or A Buying Opportunity? - 25th Feb 20
Coronavirus IN Sheffield! Royal Hallamshire Hospital treating 2 infected Patients, UK - 25th Feb 20
Dow Short-term Trend Analysis - Coronavirus Trigger a Stocks Bear Market? - 24th Feb 20
Sustained Silver Rally Coming? - 24th Feb 20
Should Investors Worry about Repo Market and Buy Gold? - 24th Feb 20
Are FANG Technology Stocks Setting Up For A Market Crash? - 24th Feb 20
Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact - 24th Feb 20
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

Crude Oil Finally Made it to US $100, Where Next?

Commodities / Crude Oil Jan 10, 2008 - 05:20 AM GMT

By: Regent_Markets

Commodities While the media's focus continues to be on the mortgage and credit crisis, oil has quietly been making its way back up to $100 per barrel. Oil has already passed its inflation adjusted peak of $80. If oil continues to rise, it will be more expensive that at any other time in history in real terms.


The direct effects of this will be felt by the already badly beaten consumers who have for years supported the US and UK economy at the expense of their savings, then house equity and now credit cards. There is a huge concern that this latest rise might be the final straw for consumers in a slowing economy.

Friday's rout was almost a perfect storm. US Payroll numbers were below expectations and unemployment rose from 4.7% to 5%. Recently bad news has sometimes been good news for the stock market because of the possibility that interest rate cuts might follow. Unfortunately, Friday's bad news really was bad news. It has increased the likelihood of further cuts to US interest rates, but the Fed may be limited in how far they can go due to the inflationary effects of a high oil price. With inflating commodity prices and a potentially deflating economy, the sellers were out in force.

The first hint of this was the US Institute for Supply Management's (ISM) report that stated that the manufacturing index fell to 47.7 percent for December from 50.8 percent in November. This sparked concerns that the economy could be slowing at a quicker pace than some investors had estimated.

A reading below 50 can signal economic contraction, whereas readings over 50 can indicate expansion. Last week the US Dollar fell heavily against the Yen and ‘safe heaven' currencies such as the Swiss Franc. It was recently reported that the Dollar's % share of foreign currency reserves has dropped at the expense of the Euro, though selling of the Dollar/ Euro exchange rate was relatively moderate on Friday compared to the falls in US equities.

Aside from US existing home sales on Monday, it is a relatively quiet start to next week, but momentum quickly builds in the final two days with both the UK and European central banks releasing their interest rate decisions. The ECB is widely expected to announce a no change verdict. The Bank of England is also expected to keep rates the same, but this is less certain and a quarter point reduction is still possible.

Friday saw some of the heaviest selling since the credit crisis broke with the S&P 500 now down 3.86% for 2008 with just 3 trading says gone. The Nasdaq Composite has been the worst hit so far and is down 5.6% in the 3 trading days of the new year. The Nasdaq 100 and broader Composite are the only major indices aside from the Nikkei to be trading below their November lows. The Semiconductor sector, full of stocks like Intel appears to be weighing heavily on the high tech markets.

According to research from Bespoke Investments and Sentimentrader.com ; last week was the 2nd worst three day start to the year ever on the S&P 500, the fourth worst on the Dow and worse ever for the Nasdaq. However, the big question of course is what this means for the future. According to the aforementioned research, a terrible start for the year may not mean that 2008 is automatically a write off. When the S&P 500 has stumbled out of the gate in the past, it gained an average of 2% over the balance of the month and 10% the rest of the year.

Oil is close to $100 per barrel but according to a Bloomberg survey of commodity analysts, the average expectation is for oil to be lower from this point forward. This could possibly be a function of lower US growth creating lower demand for energy.

The VIX 'fear' index is still below its November peak, which indicates that there may be more downside to come, however this could fall short of the all out capitulation many fear.

Therefore, a No Touch lower trade may be the better option for the rest of the month on the S&P500. The worst performance for the rest of the month following similar opening drops was -3% back in 1978. A No touch level set 6.5% below Friday's closing price (1320) could return 11% over 30 days.

By Mike Wright
Tel: +448003762737
Email: editor@my.regentmarkets.com
Url: Betonmarkets.com & Betonmarkets.co.uk

About Regent Markets Group:   Regent Markets is the world's leading fixed odds financial trading group. Through its main multi-awarding winning websites, BetOnMarkets.com and BetOnMarkets.co.uk, it has established itself as the leading global provider of a unique, powerful way to trade the world's major financial markets. The number, length and variety of trades available to our clients exists nowhere else in the world.   editor@my.regentmarkets.com Tel  (+44) 08000 326 279

Regent Markets Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules