Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

The picture on the Dow Jones Industrials Average is unfolding in a manner that is still similar to that seen a year after the last major crisis almost a decade ago - and it is troublesome in the short run.One way or another, in whichever strange ways, history has a way of somehow reflecting it’s previous shades. A year after the lows, the stock market today is once again showing signs of short term vulnerability as it did in 2010, a year after the stock market low of March 2009.Perhaps the leading signs are seen on the Dow Transportation Average which has already declined notably since the first half of May. Any lower on either the Transports or the Industrials would amount to significant bearish breaks that would argue for 6%-9% declines from current levels depending on which average we choose to look at.Perhaps it was bad timing for the Fed to be hawkish this month. Or this is a reaction to the Fed’s hawkishness itself. Either way, should this bearish picture on the Dow, as well as the bearish ones in most commodity markets, unfold, expect the Fed to “back track” on some of its recent messages.

The picture on the Dow Jones Industrials Average is unfolding in a manner that is still similar to that seen a year after the last major crisis almost a decade ago - and it is troublesome in the short run.One way or another, in whichever strange ways, history has a way of somehow reflecting it’s previous shades. A year after the lows, the stock market today is once again showing signs of short term vulnerability as it did in 2010, a year after the stock market low of March 2009.Perhaps the leading signs are seen on the Dow Transportation Average which has already declined notably since the first half of May. Any lower on either the Transports or the Industrials would amount to significant bearish breaks that would argue for 6%-9% declines from current levels depending on which average we choose to look at.Perhaps it was bad timing for the Fed to be hawkish this month. Or this is a reaction to the Fed’s hawkishness itself. Either way, should this bearish picture on the Dow, as well as the bearish ones in most commodity markets, unfold, expect the Fed to “back track” on some of its recent messages.

Given the turns already seen in bonds and industrial metals, as well as major Equity indices failing to convincingly make new highs, the Oil chart seems to now be the one that could be 'out of tune' with the rest.Developments this week give early warning signs that we might be posting an interim high. The week's closing price will be key as well as the price action over the next few sessions.

Given the turns already seen in bonds and industrial metals, as well as major Equity indices failing to convincingly make new highs, the Oil chart seems to now be the one that could be 'out of tune' with the rest.Developments this week give early warning signs that we might be posting an interim high. The week's closing price will be key as well as the price action over the next few sessions.

Founder & CEO. Oil markets macro-analysis., Vanda Insights

Vandana Hari

Founder & CEO. Oil markets macro-analysis.

Vanda Insights

Vanda Insights is a Singapore-based boutique provider of intelligence on the global energy markets, launched in September 2016. The venture was born out of a desire to extract the signal from the noise in the complex and often volatile oil markets. Our succinct and clear macro analysis is relied upon by thousands of readers globally, including those doing business directly or indirectly in the physical commodity and derivatives markets; wealth managers; governments, regulatory bodies and think-tanks; as well as trade organizations and educational institutions.

Global Energy Markets

Commodities

Crude is on a bull run.It's mainly thanks to the "Great American Reopening" trade, to borrow an apt phrase from a recent Forbes headline.The prospect of a US-Iran deal and removal of US sanctions against Iranian oil has retreated far into the future.The pandemic is still casting a shadow on other parts of world, prominently Asia, the biggest source of global oil demand growth before Covid. But it is no longer the drag on oil sentiment it was till just a couple of months ago. Why is that? We give you our take.Nonetheless, what might an unmitigated bullish perspective be missing? The considerable supply that the OPEC+ producers are waiting to release into the market!We weigh all the bullish and bearish factors in the market to see which way the needle is pointing over the coming days and the next three months or so.

Crude is on a bull run.It's mainly thanks to the "Great American Reopening" trade, to borrow an apt phrase from a recent Forbes headline.The prospect of a US-Iran deal and removal of US sanctions against Iranian oil has retreated far into the future.The pandemic is still casting a shadow on other parts of world, prominently Asia, the biggest source of global oil demand growth before Covid. But it is no longer the drag on oil sentiment it was till just a couple of months ago. Why is that? We give you our take.Nonetheless, what might an unmitigated bullish perspective be missing? The considerable supply that the OPEC+ producers are waiting to release into the market!We weigh all the bullish and bearish factors in the market to see which way the needle is pointing over the coming days and the next three months or so.

Bulls & Bears: Short- And Medium-Term View on Oil Prices

Since the release of US labour market data yields have slipped. Notable price action has unfolded for only the third time since yields peaked in late March, which indicates lower yields still.Additionally, USDJPY has faltered, which is consistent with the signs in fixed income markets.But how low is low? Could this just be a short lived and relatively meaningless move down in yields or could we see US 10Y yield below 1.46% and US 30Y yield below 2.15%?

Since the release of US labour market data yields have slipped. Notable price action has unfolded for only the third time since yields peaked in late March, which indicates lower yields still.Additionally, USDJPY has faltered, which is consistent with the signs in fixed income markets.But how low is low? Could this just be a short lived and relatively meaningless move down in yields or could we see US 10Y yield below 1.46% and US 30Y yield below 2.15%?

Brent rallied to fresh two-year highs last week, finally vaulting above the $70 mark and surpassing $71 soon after.WTI vaulted to levels not seen since October 2018, with the main driver of market bullishness, a sharp rebound in US demand, giving it a relatively bigger boost.The Memorial Day weekend travel spree in the US fuelled confidence that the country had put more than a year of Covid constraints behind it. Strong macro-economic data from the country has been steadily bolstering that narrative in recent weeks.Among the confluence of factors supporting crude’s climb were OPEC+ resisting opening the spigots a bit wider than planned for June and July, the prospect of a US-Iran deal retreating into the distance, and a sustained and sharp decline in Covid cases in India allowing states to start reopening gradually. But that doesn’t mean crude is now on course for $80, a prediction some analysts touted again last week. We explain why.

Brent rallied to fresh two-year highs last week, finally vaulting above the $70 mark and surpassing $71 soon after.WTI vaulted to levels not seen since October 2018, with the main driver of market bullishness, a sharp rebound in US demand, giving it a relatively bigger boost.The Memorial Day weekend travel spree in the US fuelled confidence that the country had put more than a year of Covid constraints behind it. Strong macro-economic data from the country has been steadily bolstering that narrative in recent weeks.Among the confluence of factors supporting crude’s climb were OPEC+ resisting opening the spigots a bit wider than planned for June and July, the prospect of a US-Iran deal retreating into the distance, and a sustained and sharp decline in Covid cases in India allowing states to start reopening gradually. But that doesn’t mean crude is now on course for $80, a prediction some analysts touted again last week. We explain why.

Weekly Oil Views: Crude May Be at an Inflection Point but $80 Is a Stretch

United States

Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a nonrenewable resource, also known as a fossil fuel, which means that it can't be replaced naturally at the rate we consume it and is therefore a limited resource.

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Crude Oil (CL1 COM COMDTY)

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Crude has hit 2-year highs. The market is bullish over global oil demand recovery, led by a US rebound. But this doesn't mean prices are headed for...

Vandana Hari

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