The Market Situation Report is a condensed version of our institutional newsletters, infused with a touch of humor. We plan to release it daily, right before the opening of the US market, and present it in a most familiar format to retail traders’ eyes by using Tradingview charts and Memes. To learn about the incentives behind it you can visit the link below.
Oil, recession, and the War between OPEC+ and the Federal Reserve
Many talking heads on TV talk about oil recession and Fed interest rate but I have seen none of them being able to connect the dots! Let’s do this with charts and make it fun!
Why all the things above should be in a chart? Nothing happens in a vacuum. Everything is connected but you must first understand it. Then you will see it without any struggle! let’s add some context to the chart and see what happens! Step by step (I wanted to say chronologically)!
The Meme comes with a message! complacency hits hard! At least it hit the SP500 hard in 2009! See that 2% Fed funds target rate? Goes up, Stays Up and oil says: I do not CARE. let’s add more to see more!
Can you see it? The higher the price of oil goes, the harder the economy faints! And then comes the age of lower interest rates and inflation. let’s take some steps further!
That chart sure contains a lot of info. if you know what has happened so far, we can start from 2017. Just make sure you have read all the prompts!
Now that you know the history, you get it! If inflation rebounds, the SP500 will go down like a falling knife.
But, why should inflation rebound? or better to ask when? Three-digit oil price is the key answer to that question.
All I need to add is that OPEC+ thinks cutting production is to their benefit. I have to admit, in the short term, that is true. But wait till the Economy goes south! Cutting oil production = Speeding up the crash!
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