The risk factors surrounding the nation’s oil industry are through the roof. The action is costing unprepared investors a lot of money. For proof, ask Delta Petroleum (NYSE:DPTR) shareholders.
Even a first grader can look at this market and know anything but fundamentals are driving the action. Fortunately for guys like me, few grade-school can figure out why.
These days, it is all about the macro-economy. More specifically, the only thing anybody cares about is the value of the dollar. When the greenback is up, the market is down (like today). When the dollar is weak, the market rallies – like last week.
There are several reasons for the trend: flight to safety, inflation, political risk… you name it.
What matters for us as traders is the pattern is unwaveringly true for the crude markets. With oil settlement denominated in dollars, the ever-important energy source is tied directly to the greenback.
The correlation
...
Tags for this Post:Bp,
Chesapeake Energy,
Chevron,
China,
contrarian profits,
correlation makes oil,
Delta Petroleum;,
Energy Industry,
ever-important energy source,
Exxon Mobil,
International Monetary Fund,
Investing Lessons,
Market Commentary,
natural gas industry,
Oil,
Oil Industry,
oil industry investors,
oil reserves,
oil settlement,
pain,
TFN Strategic Trader,
USD