NEWS AND ANALYSIS

Incisive market commentary from David Morrison

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PM Bulletin: Gold
29 Jan 2016
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27 Jan 2016
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26 Jan 2016
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25 Jan 2016
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25 Jan 2016
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22 Jan 2016
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22 Jan 2016
PM Bulletin: Dovish Draghi triggers euro sell-off
21 Jan 2016
AM Bulletin: ECB meeting in focus
21 Jan 2016
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20 Jan 2016
AM Bulletin: Stocks slide as oil slumps
20 Jan 2016
PM Bulletin: Bank of Canada rate decision
19 Jan 2016
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19 Jan 2016
PM Bulletin: Crude oil - long-term charts
18 Jan 2016
Weekly Bulletin: China and oil weigh on equities
18 Jan 2016
PM Bulletin: Long-term gold bullion chart
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15 Jan 2016
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14 Jan 2016
PM Bulletin: Equities: bull or bear?
14 Jan 2016
AM Bulletin: Investors remain jittery
14 Jan 2016
PM Bulletin: The Bank’s rate decision
13 Jan 2016
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13 Jan 2016
PM Bulletin: Saudi Aramco’s IPO
12 Jan 2016
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12 Jan 2016
PM Bulletin: US Fourth Quarter Earnings Season
11 Jan 2016
Weekly Bulletin: 2016: Trouble ahead?
11 Jan 2016
January: Non Farm Payrolls Out Today
08 Jan 2016
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08 Jan 2016
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08 Jan 2016
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07 Jan 2016
AM Bulletin: Equities slump after 2nd China trading halt
07 Jan 2016
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06 Jan 2016
AM Bulletin: China steadies and Europe rallies
05 Jan 2016
AM Bulletin: Chinese equities plunge
04 Jan 2016
 
 
 

 


I always like to get a long-term perspective on a market. Understandably, we humans tend to pay most attention to the “here and now” while as traders we have to make predictions about the future. Well, you can’t really know where you’re going until you have some idea about where you’ve been.

Typically, charts only give us a limited amount of information. Unless they are annotated by an analyst or historian, all we can see are price movements over time with no explanation for the rises and falls. Strict technical analysts will say that price is all that matters as tradable patterns are what we should be concentrating on. But most traders mix up technical and fundamental analysis as we all feel happier if we can explain something – even if the explanation is wrong.

In the mid-1980s when I started in the City, oil was trading around $20 per barrel. It continued to trade around there for the next twelve years, save when it briefly doubled around the time of the first Iraq war. The thing is, I vividly remember the oil crisis in the seventies and a general feeling of panic and loss of control as the oil price spiked. I remember seeing film on TV of endless queues for “gas” in the US, stories of violence breaking out and my dad stockpiling jerry cans of petrol in our garage. Then it was over. Oil never got back to the steady $5-6 where it traded post WW2 until the seventies. But it did stabilise at higher levels. But look what it has done since the beginning of this century. It is just fortunate that most of the world was able to cope with crude over $100; the ironic thing is that it isn’t coping very well now it’s at $30.

Here are a few oil charts from “Trading Economics.” It’s a great site with a wealth of information available and very user-friendly. I don’t know if the charts can truly predict where crude is going. But they certainly offer perspective.



Below are some forecasts for the price of oil from Trading Economics. In both cases they use an autoregressive integrated moving average model to project their analysts’ expectations.
   


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Posted by David Morrison

Tagged: Bulletin PM

Category: PM Bulletin


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