Oil Price Drops Could Foreshadow Stock Market Declines in 2024-2026
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Oil prices fell sharply between June 2014-January 2016. Tom McClellan believes declines in oil prices foreshadow stock market declines 10 years later.
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If the 10-year relationship holds, there could be a significant stock market decline between June 2024-January 2026. The magnitude is unknown.
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This relationship between oil prices and later stock moves has held for over a century, though the precise 10-year lag time can vary.
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Oil price collapses preceded major market crashes in 1929-1932 and 2008 financial crisis. However, oil did not predict the 2020 COVID crash.
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Based on this, McClellan expects the 2024-2026 period to not be great for stocks or the 2024 election winner, but sees a potential bull run in 2026-2028.