Short Term Trading Member Forum

[Blackbelt1]

Airedale--re: Oil and Stocks

When I run comparison charts between the price of oil and the $SPX since 1990, higher oil prices correspond with a lower stock market with good consistency.

When oil climbed during the summer and fall, the stock market held up well. I believe one reason is that U.S. oil companies had good hedges on oil inventories and prices through February '05. This is one reason we didn't see the price of gasoline at the pump soar--which would have put a greater tax on the consumer economy. If the heat stays on oil prices, I think we could see the pseudotrend in oil put a lid on upward cycles in stocks.

At the very least, it is going to be interesting to watch.

Do you have information that contradicts my charts comparing oil and the $SPX since 1990?

Black