The October Equtiy Collapse as we call it at Classiarius, is a function of 1. high valuations, 2. overbought indices, 3. concerns about US interest rates and rate hike trajectory – FED actions, 4. continued fear in emerging markets, and 5. US China trade war, which is far from over. We are now moving right into a shockingly aggressive world of chaos that, with the help of fired up geopolitical trends in the Middle East and the Far East, will add fuel to the fire and cause more panic with volatile markets. Remember, the European Union and the European Commission are both strong entities that must, there is no turning back on this one, must bring Italy and other member states in line. If not, the EU will start to break apart and the consequences will be strong disagreements in Europe. The entire system will break apart.
US equity prices and Oil prices are falling under the weight of said factors, for Oil the divers being overproduction by the US, cheap production by the US and destruction of demand. The US is frantically picking as many countries as possible as export targets for cheap, high quality US crude oil and natural gas. The world will be flooded with crude oil and natural gas in the coming 24 months. Oil prices will collapse. Please keep in mind that the natural tendency for Oil producers is to pump more Oil when their economies are in trouble – so Iraq, Iran and a host of other nations will be pumping Oil aggressively – Oil prices can only go lower.
More on these topics in the coming weeks