Oil broke below the sharp trend up last week in a rather violent fashion. Crude is still above the 200-day average, but the past few days action has been rather brutal, especially given the fact net speculators are very long crude. 200-day average is at the 61 level, make or break.
SPX (white) and oil have moved in tandem for some time. Below chart is not normalized, but shows clearly how oil has started fading, especially on a relative basis versus the SPX (orange).
Markets always have a theme to focus on, and currently oil is not such a big theme, but watch it carefully. Last year oil was not a theme, until it became a theme.
Interesting to see is that oil volatility has spiked violently higher during last week. If this will feed over to other assets is to be seen, but watch oil and oil volatility very closely here as it might offer clues for overall equity markets.
Source, charts by Bloomberg