The Trouble With Crude Oil

The action in crude oil has been hideous as of late, as you can see in this weekly chart:

To be fair, it doubled in a year, so some profit-taking may be in order.

However, let's hope it can resume the uptrend, or at least hold the uptrend in the $46-$47 area.

The oil rebound off the $26.05 February 2016 low played a huge role in last year's rebound.

There's been no volatility in 2017 but oil is certainly a candidate for messing up the party.

Remember, oil affects a lot more than energy stocks.

Many regional banks have large energy loan books, and weak oil means more defaults.

There are also an awful lot of high-yield energy bonds that would suffer.

And historically, weak high-yield markets means trouble for the broader equities market.

For now, the bulls remain in firm control, but oil could inspire the bears to finally step up after getting destroyed in the post-election rally.