When U.S. financial markets finished their temper tantrum over the Federal Reserve acknowledging that QE3 would have to end, the prospects of more rational market fundamentals emerged. But as we enter 2014, markets appear stuck on taper.
Since breaking the $100 level in mid-October, WTI crude oil futures have been in a clear downtrend as prices continue to fall through key support levels. Here's an options strategy to take advantage of that with a great risk vs. reward ration.
Oil looks heavy while the stock market is in a Fed induced stupor. A rumor overnight of a blast in the Suez Canal was denied by the Egyptian military yet is a reminder that we have seen the market put in a sizable Egyptian premium.
Oil prices started to give in to expectations of slowing demand, but it was the dollar to the rescue. Oh sure some traders are worried about Tropical Storm Dorian and its track, but it will be Hurricane Ben Bernanke that may be the major factor.
Australia's massive mineral exports allowed it to weather the global recession, which began in 2008, quite nicely. Recent reports show it may be sitting on untapped oil reserves 80 times larger than the Eagle Ford U.S. shale deposits.