11-29-2014, 11:40 PM
I think the market as it stands today is much different than the one leading up to the Great Recession. Pretty much all commodity prices including gold, oil, grains, and iron ore were at or near all-time highs in the summer of 2008 before the whole market collapsed.
In 2014 its nearly the opposite as gold, silver, oil, grains, etc. are all back down to near 2009 lows on the back of the extremely strong dollar and economic weakness in Europe and slowing growth in China. It seems that no matter how much printing is being done, inflation isn't happening and commodities continue to fall. As DW said, this should be beneficial to some sectors of the economy and should begin to benefit consumers with cheaper gas and more disposable income.
I personally don't see crude oil staying below $70 for an extended period of time. I think the market generally swings like a pendulum and we went from $150 in 2008 to $40 in 2009 and then back to $110 earlier this year and now back down to the $60's once again. I think we saw some forced selling and margin calls this week after OPEC surprised with no cut. If oil falls much further, consumption will increase quickly and if price stays low for any extended period of time, drilling in U.S. shale plays will slow and production will fall. I think we will generally see a $80-$110 range over the next 5 years with short periods of time above and below as the pendulum swings.
In the short term, I think retail could surprise to the upside this Christmas season, and with extremely weak comps from the bad winter last year, Q1 numbers will look good in comparison as well.
If you are a long term investor, volatility is your friend as it gives you opportunities to buy stock in great companies at a relative discount. When buying, focus on lower volatility sectors and always buy quality, financially strong companies and don't overpay for them.
If you are trying to trade, good luck!
In 2014 its nearly the opposite as gold, silver, oil, grains, etc. are all back down to near 2009 lows on the back of the extremely strong dollar and economic weakness in Europe and slowing growth in China. It seems that no matter how much printing is being done, inflation isn't happening and commodities continue to fall. As DW said, this should be beneficial to some sectors of the economy and should begin to benefit consumers with cheaper gas and more disposable income.
I personally don't see crude oil staying below $70 for an extended period of time. I think the market generally swings like a pendulum and we went from $150 in 2008 to $40 in 2009 and then back to $110 earlier this year and now back down to the $60's once again. I think we saw some forced selling and margin calls this week after OPEC surprised with no cut. If oil falls much further, consumption will increase quickly and if price stays low for any extended period of time, drilling in U.S. shale plays will slow and production will fall. I think we will generally see a $80-$110 range over the next 5 years with short periods of time above and below as the pendulum swings.
In the short term, I think retail could surprise to the upside this Christmas season, and with extremely weak comps from the bad winter last year, Q1 numbers will look good in comparison as well.
If you are a long term investor, volatility is your friend as it gives you opportunities to buy stock in great companies at a relative discount. When buying, focus on lower volatility sectors and always buy quality, financially strong companies and don't overpay for them.
If you are trying to trade, good luck!