In last week’s installment of this running commentary on the oil market/stock market relationship it was asked, "...how much longer can the stock market withstand the pressure from the currently high price of fuel?" My answer was "not much longer" based on the "channel buster" considerations we looked at in last week’s commentary. "The sharp rally in crude oil may have been ignored by most investors as euphoria and greed are the dominant emotions right now," I wrote. "But as experienced traders well know, these are emotions that typically precede market peaks."
The broad market peaked last week as expected and declined sharply on Thursday-Friday of last week in response to the price of oil moving above the widely-watched $60/barrel benchmark. As I observed last week, "Wall Street has been conveniently ignoring the rising oil price of late but that ignorance cannot continue much longer."
Wall Street has once again zeroed in on crude as oil has threatened to peak above the $60 mark. This delayed reaction of the stock market to the resurgent oil price has coin...
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