The EU decides a cap on Russian oil and the price immediately starts falling.

Tell someone else that Europe is a toothless tiger.

Since it was announced, the Brent variety (“North Sea oil”) has posted a low of around 10 dollars or 13 percent.

That's neat.

Suddenly completely new perspectives open up.

How about an inflation or CO2 cap?

Or, what is particularly close to my heart, with a cap for the body mass index (BMI)?

One decree and life would literally be easier.

Don't tell anyone it can't work.

After all, as is well known, a lid fits on every pot - even on a crooked one.

Weak Dax balance sheet

A Dax cap would be far less desirable.

But that one has been around for a long time.

For exactly 23 years, the dividend-free price Dax has been trying to establish itself above around 6400 points and fails miserably - most recently in 2021. That doesn't fit in with the mantra claimed on almost all channels "stocks always rise sooner or later".

Even if you include dividends paid, the long-term, risk-adjusted balance sheet compared to Bunds does not get significantly better, even after many years of tiny and negative interest rates.

But that should only be a sideshow today.

It's less a question of what has a lid on it, whether the lids stay tight and whether everything underneath is well lit, and more about what the recent slide in oil prices means.

The answer in one word: a lot!

Key Observation: The price of oil has fallen below $86.

The chart shown, going back almost 15 years, clearly shows how often this level was a decisive threshold.

The years 2012 and 2018 are particularly striking: ten years ago, the price of oil fell almost like a stone to this level, stabilized immediately and was only pushed below this level by the bears two years later.

Six years later, the opposite happened: After the oil price had crawled back to the $86 mark within a three-year rise, it initially bounced moderately in the two following years, later collapsed uncontrollably and was quoted at the low point in April 2020 for one Moment even below zero dollars.

One can therefore be sure that this level has been burned into the minds of market participants.

Anyone who trades oil knows the "86" - with a corridor of one or two dollars around it.

Until recently, the willingness to buy of market participants with a medium-term orientation was very likely just as great as their willingness to sell now.

MACD indicator gives hope

The result of the analysis is particularly high if you also include the displayed MACD indicator based on monthly data.

Whenever it has generated a "falling" signal in the past 15 years, i.e. there has been an upper intersection of the blue and red lines, there was not much left to gain from oil.

Or, to put it better and above all in a positive way: The price of the substance once called “black gold” made fuel and heating oil significantly more affordable for a long time and thus also reduced imported inflation at the same time.

Objections to both should currently be limited.

Technical analysis means wanting to learn from the past: It would be unreasonable to expect anything different now than in 2009, 2012 and 2019. The oil price will therefore probably continue to fall.

My goal: $69.

Once there, the bears will probably take it easy at first.

But I would certainly not put my hand in the fire today for the fact that a sustainable turnaround around this target is on the agenda.

In fact, one can or must assume, depending on one's point of view, that the coming year will be characterized by perhaps even a significant drop in oil prices.

In general, falling commodity prices are also associated with economic concerns.

It's hard to refute that.

In the meantime, I don't want to spoil the mood with that, but rather look forward to what will probably be the first truly wintry Christmas in a decade - even if it could be unusually dark and cold at times: the creation of this article was shaped by a power failure.

Not really a bad experience, more of an unusual one.

The second sweater was ready.

Only the coffee could have been warmer.

The author is the managing director of Staud Research GmbH.