‘Clobberin’ time’ continues Tuesday as oil remains under pressure

“Fear of the Fed” also continues to haunt December markets as a resumption of the brief 2015 Santa Claus Rally becomes an ever-more-distant dream.

"It's clobberin' time!" Marvel's "Thing" could be describing this week's Wall Street action. (Columnist-modified low-res image via Wikipedia, copyright Marvel Comics)

WASHINGTON, December 8, 2015 – U.S. stocks continue to gyrate wildly Tuesday morning, following through from Monday’s disaster, which, in turn, was a reversal from last Friday’s spectacular rally. Confused? So is the Maven and so are just about all the analysts we regularly follow. Not a single tried-and-true investment strategy or technique has proved effective throughout 2015 save for holding mostly cash or, for the daring, shorting anything that has to do with energy or commodities.

Leading commodities down this week, as it has for much of the year, is the price of oil, courtesy of our “friends” in Saudi Arabia. When it comes to oil prices in 2015, as Marvel’s “Thing” likes to say, “It’s clobberin’ time!” The Iron Sheiks are prepared to destroy the economies of the remaining members of the OPEC cartel to destroy their U.S. friends who figured out how to produce enough oil to eliminate the need to buy oil from Saudi Arabia. Follow?

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As the old cliché writers would have it, with friends like these, who needs enemies? Particularly when at least some of those good Wahhabi “friends” are busily turning over their excess cash to our ISIS “friends.” But this sort of thing is what passes for logic in the 21st century where the reigning business and political philosophy of advanced Western governing elites and oligarchs is stupidity.

The market results, at least, are obvious. West Texas Intermediate (WTI), the benchmark we follow here, dropped below $37 bbl. briefly on Monday, a low we haven’t seen for some seven years. CNBC tells us traders are “eyeing $32 as the next substantial level of support.” Since our long-held notion of oil’s trading range was somewhere between $40-60 before it got violated, we’re going to revise our down to a range of $30-50 for, say, the next 6 months, just because. It’s as good a reason as any these days.

Since oil directly or indirectly influences nearly everything, we have to establish at least a reasonable range to get our bearings in the market going forward to 2016. We next have to factor in the Fed’s long-awaited, likely imminent and much-dreaded interest rate announcement, likely to happen next week. Nearly everyone is betting on some kind of minimal rate hike right now, with most guesses falling in between 0.125-0.5 percent and with most of the hard betting going for +0.25 percent. We shall see.

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