Saturday, May 5, 2012

The Breakdown in Crude Oil and Gasoline

Would a decline in Crude Oil prices be good for the S&P 500? The "Power of the Pattern" asked this question on February 27 when Crude Oil stood at $109 (see post here). In the past 60 days, Crude Oil has declined around 8% and the 500 index has become fairly choppy.
The February 27 post reflects a high degree of correlation between the S&P 500 and Crude Oil. Joe Friday suggests that the upcoming action of Crude Oil and Gasoline prices (see post here) could tell us as much or more about the future of equity prices than the jobs report that came out this morning!


When it comes to portfolio construction, having a feel for the future direction of Crude Oil has been very helpful per what amount of monies should be in risk assets. Joe Friday suggests that we should respect the breakdown in Crude Oil and Gas prices this week!

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