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Since 2008, Crude Oil and the S&P 500 have often moved in sync, a high degree of correlation. The chart above highlights periods of time that the the two declined together (pink shaded areas). People often ask who comes first in these declines?
60 days ago, Crude oil peaked as it hit resistance and smart money traders established large short positions and Premium members shorted oil. Since then Crude has now declined over 15% in value.
Is the correlation between the two now broken or is the S&P 500 about to play a game of “Catch-Up” that it hasn’t had to do over the past few years?
Another way to look at this….IF oil finds support here and rallies, could it push SPY past channel resistance highlighted in the lower chart?
Stay tuned, more fun times are ahead!!!