30 Years of Crude Oil and Stock Market Action is bullish
Updated
Note the 69%, 66%, 61% 76% drops in crude oil prices going back to 1986 and see how those drops impacted the future of the stock market. We don't know with certainty that this pattern will continue, but it is interesting to look at the market and see what you can learn from what has happened in the past.
In 1986, crude oil crashed from the $30 level and dropped down to the $10 level and created a solid level of support that held the 1987 crash in late 1987.
The 1991 drop in crude oil was a solid platform where prices advanced from without much downside risk.
The 1994 ultimate bottom in crude oil proved to be another launching pad for what was to be the internet bubble from 1995-2000.
The 1998 drop in crude proved to be an important drop because it held the 2002-2003 bottom and later on it also held the 2008-2009 bottom too.
The current drop is taking awhile to form a base, but the psychology is very similar.
Post your version of this chart or your comments.
All the best,
Tim
2/24/2016 DJIA 16407 last, S&P500 1920
In 1986, crude oil crashed from the $30 level and dropped down to the $10 level and created a solid level of support that held the 1987 crash in late 1987.
The 1991 drop in crude oil was a solid platform where prices advanced from without much downside risk.
The 1994 ultimate bottom in crude oil proved to be another launching pad for what was to be the internet bubble from 1995-2000.
The 1998 drop in crude proved to be an important drop because it held the 2002-2003 bottom and later on it also held the 2008-2009 bottom too.
The current drop is taking awhile to form a base, but the psychology is very similar.
Post your version of this chart or your comments.
All the best,
Tim
2/24/2016 DJIA 16407 last, S&P500 1920
Note
I had these charts lined up when I published them, but they shifted. The start of the green box for the S&P matches up to the high in crude oil. I think the 1986 analogy is the best analogy to the current market.Note
The "crude oil bottom of 2016" did indeed great the base that was tested later on in 2016. The pattern continues....
Note
It continued indeed.
Tim September 4, 2018 12:00AM EST
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