The plunging price of oil is due to issues in Greece which could force Greece out of the Eurozone as well as a sharp slowdown in China, which has been an area of growth in recent years. The worries of further dominoes to fall could push the Eurozone into yet another recession which would reduce demand for oil. Further, agreement between the West and Iran over Iran’s nuclear program whose deadline is today would lift sanctions and enable the country to export oil once again which would have a marked impact on the supply of oil.
Market Lab Report - Premarket Pulse 7/7/15
|Published:||7 Jul 2015 12:39 ET|
Major averages fell yesterday on higher volume. With problems unresolved in Greece, the US majors trading below their respective 50-day moving averages, the mounting number of distribution days, China's plummeting stock market despite government efforts to prop it up, bullish sentiment in the American Association of Individual Investors at new lows, and spiking short interest, it's no surprise pessimism rules the day. But the market lives to fool the majority, so while we could get another selloff, a near-term low could come at any time. That said, staying on the sidelines and/or keeping a very close eye on stops in this volatile period is prudent. We will continue to watch for profit opportunities as well since such can surface at the most unexpected times.
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