Fun [not so fun] fact from the WSJ.com yesterday that justifies today's massive drop in U.S. equities -- 10% increase in oil in two days lead to big declines.
Last week was just the seventh time since 1982 that oil prices have jumped 10% within two days. And history shows that what happens next isn't pretty: The typical result for the six months after an oil-price shock like last week's is an average decline of 9.3% by the Standard & Poor's 500-stock index, according to an analysis by Cleve Rueckert, senior equity strategist at Birinyi Associates in Stamford, Conn.
Oil prices have been on fire for the last two weeks.
Crude oil is trading at more than $98 per barrel, up from $93 a week ago and $84 two weeks ago. Last week, crude skyrocketed to $103, but settled back down below $100 per barrel
Benchmark crude oil futures traded on the Comex division of the New York Mercantile Exchange (CME) rose $2.66, or 2.7% today, to settle at $99.63 a barrel -- their highest closing level since September 2008. In two weeks we have witnessed the price of oil increase over 18%, thus, expect a correction.
Go to WSJ.com to read the article, here's the link>>
SOURCE: http://online.wsj.com/article/SB20001424052748704293304576169270165303528.html
Copyright (c) The Stock Masters
