Long ago, farmers and ranchers learned that the easiest way to control cattle and other large livestock was to put a ring in their nose. They could then tether the cattle to a particular location or lead them around by simply controlling the ring.
The stock market has always had a ring in its nose. Since the Global Financial Crisis of 2008/9, the Fed has controlled the ring and the market has faithfully followed the Fed upward. However, since mid-2015, the oil sector has controlled the ring. Taking a look at this graph, it appears that oil may be leading the market in the wrong direction again.
The stock market has always had a ring in its nose. Since the Global Financial Crisis of 2008/9, the Fed has controlled the ring and the market has faithfully followed the Fed upward. However, since mid-2015, the oil sector has controlled the ring. Taking a look at this graph, it appears that oil may be leading the market in the wrong direction again.
But notice the long-term trend-line for oil prices -- that area between the red and green lines. History suggests that oil prices will revert to the mean -- that it will come back within the trend-lines, at least above the green lower boundary. If so, oil will release the nose-ring, and the market will wander aimlessly . . . until something else seizes the ring, like some geopolitical event or some technological breakthrough or some change in corporate tax rates or ... ?
More important than who is controlling the ring -- is whether the animal is still getting bigger and stronger in the meantime?
Yes, it will !!
More important than who is controlling the ring -- is whether the animal is still getting bigger and stronger in the meantime?
Yes, it will !!
