Crude oil prices are getting a wake-up call after a lowering of the U.S. oil production outlook--a report of a major drop in U.S. oil supply and a warning by S&P to oil majors cut to back more and reduce debt levels or face downgrades.
"Dow Theory" refers to a method for analyzing the stock market originally fleshed out by Charles Dow in a series of editorials all the way back in 1900. The theory has been further refined since then, but the basic tenets of Dow Theory form the foundation for much of the technical analysis conducted today.
As interest rate expectations rise, certain higher-yielding stock market sectors may lose their attractiveness on valuation concerns. So far, however, we haven’t seen a big enough drop to validate this view, but that could only be a matter of time.