This chart helps visually highlight the chart we just displayed above and hammer home the point that the next move in crude from its support should dictate near term market direction.

S&P 500 vs. Continuous Crude Oil Contract    
click for larger chart

Spx_v_crude

Source: Technimentals

As this layover chart shows crude and the S&P have tended to remain inversely related. When crude scored its recent peak (black arrow) the S&P was setting a trough (blue arrow) and as crude continued to fall the S&P continued to rally.

Random Items:

Economics Roundtable 

Amateur-to-Amateur

Economic Histories of the Opium Trade

The true story of Audion

Abolish the FCC

The Information in Option Volume for Stock Prices

Quote of the Day:

“Whoever wants to reach a distant goal must take many small steps.” 

-Helmut Schmidt, German Chancellor

Category: Economy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

One Response to “Chart of the Week: S&P 500 vs. Continuous Crude Oil Contract”

  1. S

    Barry L. Ritholtz’s blog, the Big Picture is a great read for insight on the markets. I’ve always understood that the price of oil is really important in valuing stocks, but never knew how tightly correlated the price of oil and the market is. Here’s a…