Lets not forget who wags whom, to this date still. If gas prices become too expensive for Wal-Mart shoppers, gas prices will either go down or increase at a much more moderate pace, which is good for stocks in both cases because the stock market has shown that it is willing for now to adapt to continuously increasing oil prices, as long as the pace of the increase is not too fast.
There's not much upside for oil and not that much downside for stocks but there's substantial upside for bonds that have demonstrated their strength today. They have been going down in the past few weeks on renewed confidence in the strength of the economy (and the likelyhood of higher interest rates)and are likely to go back up now that confidence is erroding somewhat with high oil prices. Being long Treasury futures/options seems to be the safest bet to profit from the situation that was depicted today.
