Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Why Syria Conflict Is Hitting Markets Hard

Stock-Markets / Financial Markets 2013 Aug 30, 2013 - 10:27 AM GMT

By: Profit_Confidential

Stock-Markets

George Leong writes: Syria is on the verge of expanding its current conflict to include the United States and its allies as the chaos in the Middle East continues. Then there are also the tensions in Egypt and Iran.

If the U.S. and its allies attack Syria, the impact on the global economy and the stock market will be negative and how bad it gets will largely be dependent on the degree and length of the war.


We are already seeing what’s happening in the market. Oil prices have been rising, especially Brent crude, due to the obvious impact the escalation of a war would have on oil flow.

The chart below of the spot price of Brent crude oil shows the breakout at the $110.00 level.


Chart courtesy of www.StockCharts.com

So, you have Iran and Iraq as neighbors of Syria. While both are not part of the Organization of the Petroleum Exporting Countries (OPEC), there will still clearly be a disruption to the oil flow, especially to Europe and Asia.

If you are an active trader, you should look at either buying oil-based exchange-traded funds (ETFs) or oil futures, or playing the market via leveraged call options on oil. Either way, money will be made if a war surfaces—just think back to what happened in Iraq.

Of course, with higher oil prices comes a major hike in gasoline prices. But that’s clearly not what we want to see at this time, given the lack of consumer spending that America needs to drive its gross domestic product (GDP) growth.

The one thing is that should the situation in Syria escalate, the Federal Reserve may hold off on tapering until October or December. Failure to do so could weaken the U.S. economy.

The second money-maker in the case of an outbreak in Syria is gold, which has already been surging higher as capital rotates away from equities and into the safety of gold.

Note the pop in the chart below and the uptrend since a bullish double-bottom formation in July, based on my technical analysis.


Chart courtesy of www.StockCharts.com

Yet in both the case of oil and gold, I view the buying opportunity at this time as a trading strategy, and not a shift in the commodities’ underlying fundamentals. If nothing happens in Syria, I doubt gold and oil will hold or move higher. (Read “Yes, We’re Bullish on Gold, But Here’s One Bear’s Case Worth Reading.”)

With this in mind, I wouldn’t be going out and accumulating gold mining or oil exploration stocks if the Syrian crisis intensifies.

Rather, I would trade the underlying commodity in gold and oil via options, futures, or ETFs; I’d avoid stocks, however, since there is a tighter correlation between the actual commodity and prices.

Source: http://www.profitconfidential.com/stock-market/why-the-conflict-in-syria-is-hitting-the-markets-so-hard/

George Leong, B.Comm.

http://www.profitconfidential.com

We publish Profit Confidential daily for our Lombardi Financial customers because we believe many of those reporting today’s financial news simply don’t know what they are telling you! Reporters are trained to tell you the news—not what it can mean for you! What you read in the popular news services, be it the daily newspapers, on the internet or TV, is the news from a “reporter’s opinion.” And there’s the big difference.

With Profit Confidential you are receiving the news with the opinions, commentaries and interpretations of seasoned financial analysts and economists. We analyze the actions of the stock market, precious metals, interest rates, real estate and other investments so we can tell you what we believe today’s financial news will mean for you tomorrow!

© 2013 Copyright Profit Confidential - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in