U.S. stocks and oil can sometimes move together, but a period of decline for oil ten years ago indicates potential for a steep stock market decline that may begin this summer, according to Tom McClellan, editor of The McClellan Market Report. In what he referred to as a “fun leading indication relationship,” McClellan wrote in a Thursday note that the movements of crude-oil prices
CL.1,
-1.17%
CLJ24,
-1.17%
“tend to show up again as stock price movements about 10 years later.”
He admits that he doesn’t have a good explanation as to why this relationship works, but believes it has been working for the most part ever since the Dow Jones Industrial Average
DJIA
was first created back in 1896. “At some point, when there is this much evidence, one can let go of the quest for the ‘why’, and accept the ‘is’,” said McClellan.
Crude-oil price movements have shown up as stock price movements 10-years later, says Tom McClellan, editor of The McClellan Market Report.
McClellan Financial Publications
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CL.1,
-1.17%
CLJ24,
-1.17%
“tend to show up again as stock price movements about 10 years later.”
He admits that he doesn’t have a good explanation as to why this relationship works, but believes it has been working for the most part ever since the Dow Jones Industrial Average
DJIA
was first created back in 1896. “At some point, when there is this much evidence, one can let go of the quest for the ‘why’, and accept the ‘is’,” said McClellan.
Crude-oil price movements have shown up as stock price movements 10-years later, says Tom McClellan, editor of The McClellan Market Report.
McClellan Financial Publications
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