Crude Pressuring the SPX

L

Landis82

Falling out of bed this morning after the OPEC production cut news of -2.2 million barrels.

Now trading -$3.25 in the January contract at 40.35, which expires later in the week.

The OIH just dropped 3 handles off the highs made at 11AM EST.

:eek:
 
Yea, when oil was $145, oil was so scarce since no one wanted to sell it and everyone wanted to buy more.

Now oil is $40, everyone wants to sell it, and no ones wants to buy it.

Anything wrong with this picture?, it just seems backwards to me.
 
Quote from cybtropic:

Yea, when oil was $145, oil was so scarce since no one wanted to sell it and everyone wanted to buy more.

Now oil is $40, everyone wants to sell it, and no ones wants to buy it.

Anything wrong with this picture?, it just seems backwards to me.
More...

You have to understand that crude oil is priced AT THE MARGIN.

When economies are roaring across the globe, the DEMAND for crude at the MARGIN ( for that last barrel of oil ) is extremely high.

Likewise, the inverse is true.
 
Ironically, crude was the last bastion of defense for the indicies last summer when it was trading in the $120+ and above. Those energies kept this market from imploding sooner. It also kept the spectre of inflation alive and a reasonable bid below the market as generations of perma-bulls believed in the inflating powers of the wizards running the Fed.

Funny how in 04-05-06, the thought of crude skying made the prognosticators bearish on equities, when the reality was the epic fall was the final nail in the coffin.
 
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