timwest
Long

Drop in Crude oil Helped Stocks: Now what? Buy Crude, Short...

NYMEX:CL1!   LIGHT CRUDE OIL FUTURES
534 10 8
You can see the dramatic fall in the "stock market tax = crude oil             prices"...

But have crude oil             prices turned the corner?

Buy crude oil             and short the stock market: $ for $

Tim

Friday, August 29, 2014 4:36PM EST
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DavidStone
2 years ago
Seems like bonds also support this thesis.
Reply
StealthTrader
2 years ago
Agree
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Victor.Y.F
2 years ago
SPX500 should reach 2025, but oil have no correlation with spx500 in stead of having correlatiio with USD/CAD, negative.
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Victor.Y.F Victor.Y.F
2 years ago
Saw your chart before, SPX does have correlation with SPX500 but SPX will fall from 2200 soon
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Victor.Y.F Victor.Y.F
2 years ago
I'm sorry. SPX does have correlation with Oil.
Reply
timwest PRO Victor.Y.F
2 years ago
Keep in mind how imprecise the calculation of "correlation" is. It is not the best way to measure if two markets move together. Two markets can have a lead-lag pattern and not show up well with Correlation coefficients. Just something to keep in mind. I like to do "overlays" and see if two markets do move somewhat in synchrony or not. Thanks for your comments.
+1 Reply
Babar PRO
2 years ago
i like your charts a lot but i can't understand the technicals nor fundamentals supporting your theory on this one. Lately OIL has been having some negative correlation with Stocks, same with COPPER vs Stocks. I consider those two to be the pulse of the market. They are certainly not supporting stock prices lately. With Copper hitting its 3$ Pivot price range and Oil not catching a lot of upside regardless of Higher highs and a supposedly healthy economy this can only mean one thing : Stocks will catch up soon. Or maybe are they strong enough to keep pulling Copper prices and OIl demand up for another while and prevent them from breaking lows....Maybe, but in that case i would continue to buy Oil on stock dips and never be on the lookout of a negative correlation unless there is somekind of of fundamental reason, which i can't seem to see nowadays. Maybe i am totally wrong and in that case i would be pleased to know why. Thks for sharing. And another important thing, Crude OIL has been above short term support on monthly chart and incapable of maintaining its course north thus breaking lows and prices are now below this pivot, 10/10 this is failed breakout and prices continue to correct slowly but surely, until broader market does too and this catches some speed.
snapshot
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timwest PRO Babar
2 years ago
Have you seen the other charts that I have published on crude oil versus stock prices? There are some distinct patterns that are useful. I'm sorry my recent post doesn't appear to make sense. My post is simply to point out the divergence between crude and the S&P500. See what you think of the other charts I have posted, then please feel free to reply again. Thanks!
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Mr DL
2 years ago
Right now is the time to buy UCO at 31.86 or so.
Should give a 2-3 day rally
Reply
timwest PRO
2 years ago
Now it is even more extreme. If you take another look, this trade might be worth trying again.
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