A "Crude" Awakening

decreasing oil pricesMarkets started lower on Monday, mostly due to lowering crude prices, as oil hit its six-week low at $64. This is bad news from an investment standpoint, for those who were banking on continual rocketing oil prices, but from a consumer side, this is better news. The consumer is fighting enough battles, without having to worry about $3+ per gallon gas prices. Hopefully, we can see oil pullback into the low $50's and begin to stabilize. In time it should push back up, but that should be further down the road when inflation becomes an issue.

After being down around 70 points in the morning, the market has pulled back midday and has actually gotten in the green. I don't expect to see much of a big move either way today by close, but thus far, my DUG shares and DXO puts are performing very well.

For those that keep up with the site, know that I am an avid believer in the near term threat of deflation, which if we continue to see dropping energy and commodity prices, as well as an increasing dollar, only supports my belief more so. At this point, if deflation does become as big of a problem as I feel it definitely could, markets should experience serious selling pressure. You can track oil funds and other sector funds at Morningstar. For a free trial, click here : Morningstar Investment Research: Free Online Trial. 4,000 In-Depth Reports, Ratings. Data on 20,000+ Stocks and Funds.


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