Besides media's comments on how lower oil price is helping the consumers and business, we should not overlook what has happened in the past when oil price got crushed. Ignoring history is a preparation for the same kind of mistake. History says that a sharp decline in oil price is a pre-requisite for recession. Given the improving economic situation of the US, it is hard to believe that a recession is likely. But, we need to hold our positions tied and keep the stop closer. Lock in any profits.
Comments
timwest
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Great chart - Thanks for posting! I would add that the Government often declares "recession" so far behind the reality of recession and then declares the recession over well past the end of it. That lag is what is challenging for investors. Either way, I really like your chart.
seine
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Thanks for the compliment Tim. I agree with you about the lag in reporting the news.
I think that the move in the oil is, to a certain extent, deliberate. The US government may be using it to contain ISIS and also threaten Russia. So, recession might not necessarily be coming very soon. I am not very sure though. As always, it is unpredictable.
sammantic
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I'll also add Central Bank operations are in full effect. However like you said the pattern is there and it is unpredictable. More signs of delation if you ask me.
SS96
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you missed 1997-1999 decline... that was too early :)
QuantitativeExhaustion
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recession and currency crisis. you forgot 1998 Asian currency crisis. So are we having a currency crisis ? In Venezuela and Russia, along with Nigeria and Angola
seine
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hmm that is interesting. USD is definitely dominating right now. I don't know if it has gone to the level of causing crisis to other currencies.
seine
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thanks for sharing.
QuantitativeExhaustion
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50-70 might be the new normal
tst
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Past three have played out with a spike rally up then a fall. Currently it has just rolled over with out the spike. So massive demand followed by over supply. This time just over supply. draw from that what you will but worth noting. nice chart.