Are Markets Really Correlated Any More?
I am writing this to dispell the idiotic rumors around some market participants thinking that crude oil is dragging the markets down with it. I have posted charts on both below to show you the long term trends or no trends that are now in place.
Back before 2008, the markets functioned freely where price discovery was determined by the market participants and central bank intervention was reserved for the BOJ. Since that time central banks control the markets and they control the prices of many other markets that used to function freely which is why I told you not to expect a bull in commodities any time soon.
Ok so looking at the markets can you tell me exactly where crude has been affecting the markets since 2009? You can see that crude took a big dive in 2014-15 eventually bottoming out at the 28 area. Did the DOW and S&P follow? No, they didn't. They sold off a tiny bit and then went on a tear to new highs shortly thereafter while crude wallowed in its lows.
Did crude rally to new highs like the DOW and S&P did making very strong moves up? No, it didn't. It has been sideways ever since caught in a range between 64 and 48 roughly. You can see the lines on the chart below where it has stayed.
How about the Dollar. Surely the Dollar must have rallied to incredible highs with crude falling the way it did. Nope. It has essentially be sideways between 90 and 100 since 2014.
I don't know why these supposedly very smart people can't see what I see. It is as obvious (from price action) as the day is long.
I have told you this before but if you listen to the Perma bears right now (who I might add have NO money on their predictions) you are going to miss some golden opportunities.
Just for reference, the DOW is not too high. It should be about her if you look at an inflation-related level. It needed to be at around 28,000 and over the next few years, it should hit around 32-35,000.
The bigger problem they have is how to stop putting the money into the ultra wealthy's hands and into the people who need to reduce debt.
Once again buy the dips. If crude makes it to the 46 level look to buy. Cheers!
Back before 2008, the markets functioned freely where price discovery was determined by the market participants and central bank intervention was reserved for the BOJ. Since that time central banks control the markets and they control the prices of many other markets that used to function freely which is why I told you not to expect a bull in commodities any time soon.
Ok so looking at the markets can you tell me exactly where crude has been affecting the markets since 2009? You can see that crude took a big dive in 2014-15 eventually bottoming out at the 28 area. Did the DOW and S&P follow? No, they didn't. They sold off a tiny bit and then went on a tear to new highs shortly thereafter while crude wallowed in its lows.
Did crude rally to new highs like the DOW and S&P did making very strong moves up? No, it didn't. It has been sideways ever since caught in a range between 64 and 48 roughly. You can see the lines on the chart below where it has stayed.
How about the Dollar. Surely the Dollar must have rallied to incredible highs with crude falling the way it did. Nope. It has essentially be sideways between 90 and 100 since 2014.
I don't know why these supposedly very smart people can't see what I see. It is as obvious (from price action) as the day is long.
I have told you this before but if you listen to the Perma bears right now (who I might add have NO money on their predictions) you are going to miss some golden opportunities.
Just for reference, the DOW is not too high. It should be about her if you look at an inflation-related level. It needed to be at around 28,000 and over the next few years, it should hit around 32-35,000.
The bigger problem they have is how to stop putting the money into the ultra wealthy's hands and into the people who need to reduce debt.
Once again buy the dips. If crude makes it to the 46 level look to buy. Cheers!
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