High Gas Prices Kill Growth, Everytime!
On April 28th I wrote a blog saying that the market was overvalued and that high gas prices would kill the economy. I said that the market would have a big pullback in the next couple of months. A lot of people said that you can't predict the market and it is too random. I would argue that if gas prices skyrocket you can predict the market. Since my prediction the Dow is down 6%. Many economists believe that high gas prices caused the recession in the first place. For proof look at the gas prices from July of 2007 at the height of the market. http://www.gasbuddy.com/gb_retail_price_chart.aspx?time=3 In July of 2007 the stock market and gas prices both peaked and crashed after that. If you look at the last couple of months gas prices skyrocketed and the market soon crashed. If you look at the charts of the DJIA and gas prices they correspond very closely. http://finance.yahoo.com/echarts?s=%5EDJI+Interactive#symbol=%5EDJI;range=5y I hope that the next time gas prices skyrocket again people will be smart enough to see the market crash coming and get out of the market.