Thursday Nov 17, 2011
This article explains the jump in West Tx Intermediate versus Brent North Sea oil this past week.
Despite all the media attention he gets, Bill O'Reiley never understands that higher oil prices are coincident with higher stock prices. Yes Bill it's all one market, higher oil prices reflect economic confidence as well as the ability to pay for the oil. Just look at 2008. As oil peaked at $145 the stock market was still up, but by December with $35 oil, stocks had crashed.
I just got received today's WSJ and the lead article on Page One details the pipeline changes.
Here is a graph of the VIX versus the price of West Texas Intermediate.
OIl is in red black and the VIX the fear index for the stock market is in green. The red and green arrows highlight the polar opposite nature of the indicators. At bottom the correlation coefficient indicates that the two are usually out of synch with one another and nearly always in the negative category.
And so we have yet another Dashboard indicator to follow. Expect Patterson, the XES Energy Service Indicator and the SPX to all top, when the VIX bottoms this next spring.
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