One of the more important aspects to understand about the market is the correlation between asset classes.
A significant correlation I’m seeing right now is between crude oil and the rate of inflation or, more specifically, interest rates.
The reason I’m bringing this to your attention is because people are struggling to figure out when we’ll get to a point where consumers will truly slow down and inflation will ultimately have a trickle down effect.
One of the things you can watch to help pinpoint this is oil.
Oil recently went to almost $100 a barrel, and of course, as that happened, interest rates continued to push higher.
At some point, the cure for higher oil prices is higher oil prices…
Sounds like a riddle, doesn’t it?
Allow me to explain…
In today’s 2-minute video, I explain the cure for higher oil prices, how the price of oil can help predict what other equities do and what to look out for and expect to see when the correlation breaks.
I release these weekly tips every Thursday for free, so stay tuned and stay subscribed here.
Editor of 11-Day Trader