Interesting observation: why is crude lagging behind indexes???

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Subprime JD's picture
Subprime JD
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Joined: Feb 17 2009
Posts: 562
Interesting observation: why is crude lagging behind indexes???

A little bit ago when the SPX hit 955 intraday, crude peaked at $75. Now, SPX higher at 977 but crude is lagging at 65. USD index is just as low as before at 78.5. So whats the deal? Higher stocks, just as low dollar, yet crude underperforms by 13%.

One plausible reason is fears of government controls in commodies speculation. The gov reasons that speculators are responsible for the steep rise in crude. While that may be true to a certain extent notice how speculators sell just as fast when prices fall. If gov succeeds in mitigating the effects of specs in the commodities markets all that means is that price moves will be slower.

Eventually, when demand exceeds supply the price will move up sharply, thereby having a more dramatic effect on world markets. Let the speculators gamble please LOL

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