The Market

And the coverage of supply for the next few days is a 13% above the average cycles. Those of you who have some experience in reading data from energy stocks generally know that the correlation between data on stocks and oil prices, in particular, is very slight. However, the logic of time will lead us to believe that some other influence. When completed the times of uncertainty is one of the main questions we are trying to solve now. Although there are signs of recovery, we can assume with some certainty that is likely to take some time. If we go back in time to observe the development in oil prices from rising above $ 148.00, we see that we quickly recovered half its losses, with the WTI crude oil trading in the area of $ 76.50 today. The market has drawn a very strong trend, even with a movement toward $ 68.50 in the lower leaves it in an uptrend. Anyone who collate the chart of the S & P500 index and WTI crude oil chart verify that there is a high degree of correlation of the price.

Many believe that if the shares rebound, we have a clear sign of recovery. In the short term this has proved true. Unemployment rates in the U.S. published recently have pushed equities lower, and the WTI crude is down with them, which resulted in a loss of $ 2.00 on that day. The next day we saw gains in crude, in line with sharp gains for equities. If we leave equities aside, technical market data indicate that the level of $ 76.50 will be the key short-term level. If the correlation in the short term continued compliance with respect to equities and oil, we will see a drop in stocks before we can see further drops of oil. As regards the long term, we must be sure and review key data surrounding the market.

With this in mind, we must be very clear about the real factors that drive the market: the supply and demand. What is also clear is that demand remains very low, with little certainty about when the recovery finally imposed. The inefficiency of the future oil will be a key element to be considered at the time, and in general, unless it is established in the short term, contribute to higher prices. However, inefficient energy use has very high costs, which will not be good for equities. In other words, do not trust too much of the next short-term trends, because the change to recovery necessarily involves a solid fundamental data.