Oil prices are marching higher as geopolitical risks rise.
Spikes in the price of oil and gold on the back of geopolitical risks are usually reversed within weeks when nothing much happens.
That may be the case this time around, but the technical situation in oil prices is explosive.
I make the case in today’s Closing Bell video that brent crude oil prices could spike towards US$107 if resistance at US$96 gives way (current price is US$91).
That could feed into heightened inflation expectations down the track, which could hurt bond and stock prices.
US stocks remain in a strong uptrend so it will take plenty of downside volatility to threaten the positive momentum. But as the rally continues heading higher, there are resistance zones that investors should be aware of, which I point out in the video above.
As long as US 10-year bond yields remain below 4.40%, there is reason to remain bullish on bonds, but above there we could see a spike in yields towards 4.70–4.90%, which would place some pressure on stock prices.
Regards,
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Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps
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