Oil remains a key warning

Whilst the bull maniacs have enjoyed a huge equity bounce from sp'1820 to 1965, Oil prices have remained very weak. With the $80 threshold already taken out, there is little reason why prices won't slip to the $70s.. or even 60s into early 2015.


WTIC, monthly2, rainbow

Summary

Yes... I know there are MANY reasons, not least those of supply/demand that will determine prices, but without getting into all of that (on a Friday night)... what is clear, prices are LOWER.

The key support of $90 - something I have been highlighting for almost TWO years, has been decisively broken. The fact we're already seen the $79s is added clarification of the underlying weakness.


Implications for equities?

Without question, the lower Oil price should be seen as a deflationary warning (along with Copper), and it bodes for much lower equity levels into year end.

ALL industry will of course benefit from lower energy costs, so, it does bode for a boost to earnings for Q4 and probably also at least Q1.

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Anyway, its been a long week... that is all for today.

Goodnight from London
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*the weekend post will be on the US weekly indexes