Where will the most important commodity in the world halt is fall, the House of Saudi says $40.

In 1985 Saudi (OPEC) did a similar sell off to protect their market share when the UK North Sea oil came on line. World oil prices plunged 69%. Lets face it, oil above $100 with all the new supply on the market was just to high, and as the Saudi's put it, $100 allowed a lot of inefficient producers to enter the market (ie US shale oil), and has allowed Russia to expand its energy complex. Therefore the current sell off is forecasting lower oil prices for many years to come, most likely between $30 to $50 for a year or two, then a little higher after that, it may be that $100 oil wont be seen again for 5 to 10 years.

Of course all the debt associated with oil exploration while oil was above $100 is going to smash risk markets around for the next 12 months. You can not mention debt blow ups, with out the risk of derivative blow ups either. This risk will make it hard for risk on markets to climb higher.

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Here is a chart with Crude, US dollar (DXY) and Gold (GLD). When crude stop falling, the USD will start to fall as traders will take profits on that event. Thus anti USD trades (ie metals, forex) will begin to rise.

Click on picture to enlarge

NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net 

Investing Quote…
 

..“Experience has proved to me that real money made in speculating has been in commitments in a stock or commodity showing a profit right from the start.”..

Jesse Livermore

..”It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong”..

George Soros