higher rates will cause a recession, but oil will spike as an indicator that a recession is nearby
although it's not definite that it will happen in 2016
USO - time to go long oil
- Thread starter recession2016
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higher rates will cause a recession, but oil will spike as an indicator that a recession is nearby
although it's not definite that it will happen in 2016
It was not a sincere question, but your answer seems to be reaching for confirmation bias
Come again? How does an oil spike cause a recession? And what exactly would cause this oil spike? Surely it's not the millions of barrels of oil sitting on cargos all over the world wasting away looking desperately for a buyer.
not sure exactly, i'm not qualified to answer that....just because the trend now is bearish doesn't mean it will stay that way in the future
1973/1980/1991/2001/2008 all recessions that were preceded by a spike in oil prices, and in some of these years oil was in a dominant downtrend like it is now
it has been 6 years since the last recession, it's a matter of when, not if
So consider those instruments which benefit directly from a spike in oil but aren't directly invested in futures. Like, XOM. Or FCX (half kidding, but it shot up this week on a moderate bump in spot).
Why do so many want to reject the undeniable truth ? Namely, that the world is awash in crude oil, that North America is the largest producer of crude oil in the world, that the latest omnibus spending bill lifted the ban on American crude exports, and that in 2016 Iran gets to export without sanctions. It's human nature to be inquisitive, but when the market is telling you something try listening. Things are worth what people are willing to pay for them.
Another falling knife catcher ...
Saudi Arabia is running a deficit, the entire Russian economy is based on the premise of oil > $50, and Iran will be looking to raise cash. Any rally will be heavily sold into - as we have seen earlier this year. I personally don't see the case for "solid" supporting technicals or fundamentals. In fact, some might make the argument to test the stops in the low $30 range - it's essentially a free put.
Bone, I'm sure you know this all too well, but those who can't trade usually find it far easier to just try to pick tops and bottoms. The market has a way of removing those individuals from this game.