Normal
[ATTACH=full]143189[/ATTACH]Alright so the current dance is inflation vs recession (stagflation is when you have both and that's what they're trying to decide on) and which way the fed and powers that be want to err. As we've seen over the past week or so, after the inflation narrative was front & centre for the first half of the year, now with yellen, powell et al on record as stating they are "steadfast" in getting inflation back down to 2%, it's recession.What us retail trading plebs need to remain cognisant of is that it is these very inflating energy costs which are actually causing the recession. We saw energy companies just scream at the start of the year because hey, the consumer had spare cash that could be squeezed out of them.With interest rates now so much higher, we're now at the point of markets wondering if there's anything left to squeeze, and that's why we see prices dropping - there's just no spare cash left to demand oil.So we now see a seesaw - oil prices go up, costs then increase, consumers don't buy as much stuff/demand goes down, oil prices go down, stuff gets cheaper so people then start buying/doing more stuff and around and around we go.We obviously do not know where this is going to bottom and this is why we see the wild gyrations as the seesaw tips one way and then back the other. Hopefully everything I've pointed out so far is fairly obvious.What is key to note here is that these are DEMAND side movements. The big fluctuations we see are demand (or lack thereof) driven. But the TREND we see energy on, that's a supply side (lack of supply side) one, and as I've pointed out in quite a few posts going back weeks, there's really nothing to suggest any real increases to the supply side of the energy equation any time soon.So my play is still "buy the dip", it's just buy the dip in energy rather than tech now.
[ATTACH=full]143189[/ATTACH]
Alright so the current dance is inflation vs recession (stagflation is when you have both and that's what they're trying to decide on) and which way the fed and powers that be want to err. As we've seen over the past week or so, after the inflation narrative was front & centre for the first half of the year, now with yellen, powell et al on record as stating they are "steadfast" in getting inflation back down to 2%, it's recession.
What us retail trading plebs need to remain cognisant of is that it is these very inflating energy costs which are actually causing the recession. We saw energy companies just scream at the start of the year because hey, the consumer had spare cash that could be squeezed out of them.
With interest rates now so much higher, we're now at the point of markets wondering if there's anything left to squeeze, and that's why we see prices dropping - there's just no spare cash left to demand oil.
So we now see a seesaw - oil prices go up, costs then increase, consumers don't buy as much stuff/demand goes down, oil prices go down, stuff gets cheaper so people then start buying/doing more stuff and around and around we go.
We obviously do not know where this is going to bottom and this is why we see the wild gyrations as the seesaw tips one way and then back the other. Hopefully everything I've pointed out so far is fairly obvious.
What is key to note here is that these are DEMAND side movements. The big fluctuations we see are demand (or lack thereof) driven. But the TREND we see energy on, that's a supply side (lack of supply side) one, and as I've pointed out in quite a few posts going back weeks, there's really nothing to suggest any real increases to the supply side of the energy equation any time soon.
So my play is still "buy the dip", it's just buy the dip in energy rather than tech now.
Hello and welcome to Aussie Stock Forums!
To gain full access you must register. Registration is free and takes only a few seconds to complete.
Already a member? Log in here.
