Portraits from the Dark Period
"The price has nothing to do with a shortage of oil.
There's a lot of oil on the market. It's because of speculation and OPEC cannot
control speculation." Quote by OPEC
Secretary General Badri.
Some people are audible learners, some learn based on touch,
some by interaction, for the visual leaners out there I provide the following
work of art, which I call the “Risk-On Correlated Asset Motif” from the Dark
Period by Jerauld de Speculator.
1 – Day S&P 500 & Brent Oil
Comparison
4 – Month S&P 500 & Brent Oil
Comparison
6 – Month S&P 500 & Brent Oil
Comparison
9 – Month S&P 500 & Brent Oil
Comparison
2 – Year S&P 500 & Brent Oil
Comparison
3 – Year S&P 500 & Brent Oil
Comparison
5 – Year S&P 500 & Brent Oil
Comparison
Correlated Global Markets require one
thing, a whole lot of Juice!
The first thing you have to realize about markets is that
they are crooked. If you believe the price of oil has anything to do with the
stuff that comes out of the ground, then I have some nice beachfront property
in Louisiana for you.
It is all about the juice, whether it is 401k money coming
in the beginning of each month, Central Bank injections, share buybacks,
increasing leverage ratios, or currency funding the initial money has to be
there in what I call the juice for markets, and I mean all markets.
This is why before and during almost any major up move in
markets traders go to the EUR/USD and USD/JPY funding crosses for the juice to
propel the move. It all starts with the juice, that is what determines price in
markets.
This is why the S&P 500 has stalled for a couple days;
traders are waiting for the next juice injection into markets. There would have
to be some ‘crazy good’ news for firms to extend their leverage ratios at this
point, so they wait for the next big fed injection, major currency move, or
401k money for their next major move up in markets.
Finally, those traders who think they are trading oil, you
are actually trading the S&P 500, for all intents and purposes, it is the
very same liquidity fueled market.
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