1) At no point in history have we seen such distortions to the financial markets as we are seeing today due to the unprecedented intervention in the financial markets by global central banks. Therefore, I wouldn’t bet too hard on historical correlations between certain assets classes playing out in the foreseeable future as they have in the past. Case in point: Dr. Copper has been stripped of his medical license in recent years for losing his long-standing ability to forecast (or even confirm) the future (or current) trend of the market (along with many other recent disconnects of strong historical correlations in recent years, such as that between commodities & equities).

2) Let’s also not forget that following the stock market peak in Oct 2007, while the S&P 500 fell by over 21%, crude soared by 77% over the same time period. This doesn’t mean that the bullish crude/bearish equity scenario will or must play out, only that it certainly can, at least for a very large price differential between the two, particularly in scope, even if not so much in duration.