Wasn’t that amazing news regarding oil? All that excess supply, sloshing around reservoirs, weighing down queued-up tankers clogging ports around the world — not a problem any more. Our Peak Oil forecast? Fuggedaboudit.
The Nikkei 225 is up 13% in the 13 days since the US election (of a man who has pledged to dismantle the TPP) — even though the value of the yen has plunged 10% since election night lows and oil has spiked 16% in the past week or so.
When we talk about algos driving equity prices, that’s the rub. Whether or not the OPEC deal comes together (I’m thinking not), the constant jawboning has driven equities higher anyway. Long after oil plunges into the 30s, we’re looking at new all-time highs.
Like Uncle Seymour’s ill-advised political rant over Thanksgiving dinner, all-time highs can’t be taken back — no matter how unjustified they might be.
From a charting standpoint, new highs dramatically change things. Though, it’s worth noting that they dramatically changed things in October 2007, too.
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