Today is Sat, November 18, 2017 7:20:52 GMT
RSS Follow Us Follow us on Twitter Friend us on Facebook
Contributors Oil to Act Like an Ankle Weight Upon Stocks.

When oil gets to the $90-$100 a barrel level, stocks have a hard time dealing with it. For instance, take a look at what level oil was at each of the last two times that stocks had a sizable correction and you’ll see what I mean. Click on the chart to enlarge it.

And here’s the problem…we’re at a “new normal” for oil.

For years and years, oil traded between $10 and $40 a barrel. But around 2004 that all changed. A volatile uptrend begun that now has oil trading largely between $50 and almost $150 with $80-$110 being a new average price. Check it out below.

So how is corporate America supposed to cope with this. After all, if you want to expand your corporation, you have to expand your number of locations and ship more products.

Expanding locations means more places to drive between or fly to for the corporation.

With their products it means that it will cost more to get their products to the end user because it will cost more to get the product to them via 18-wheeler, jet or ship.

Any way you slice it, this “new normal” for oil is not a good thing for corporate earnings and therefore not a good thing for stock prices.

At best stocks likely stay trapped in a really volatile, wide range for the next 5-10 years at least.

The worst case scenario of course is a new downtrend.

Who wins? The currency trader.

Currencies are more nimble. You can short them more easily in a more liquid market. It costs less to do so and you can do it anytime 24 hours a day.

To make money in the upcoming years, you’ll have to be nimble. A simple “buy and hold” approach to an index fund isn’t going to cut it.

So get started in the currency market today and learn how to prosper through these tough times.

Sean Hyman
My E-Book
info@worldcurrencywatch.com
Editor, Currency Cross Trader

 

Recent posts by forexnews