Futures getting smoked like salmon this morning. Here's a hint why: Because crude is falling. Forgive me... I'm not much for subtle hints.
If you're still doubting the cause and effect between the uncontrolled price drop in crude and the negative impact on stocks take a look at yesterday. At one point Thursday morning the Dow was up more than 220pts and the S&P 500 had gained 1.5%. At about 1pm crude rolled over in earnest. From then it was a race to the see if we could get to the closing bell before all the gains were lost.
We did but just barely. The S&P gave back more than 20 points in the last 3-hours. Sure we finished 9pts higher but that close thud left the tape below support and still vulnerable for more losses.
Stocks are going going to continue to get sold when crude gets crushed. You're free to object to that idea. It may not seem intuitive to you. That's fine. I'm not trying to persuade you. I'm just telling you what is happening. How you react is your business.
The upside is that gas is still plummeting. Prices at the pump have fallen more than 4% to $2.60 this morning. Since there's a lag between crude and gas look for us to be at $2.50 sooner rather than later.
The big picture is that consumers have more money to spend but the world is going to hell in a handbasket and financial markets are going with it. I've got a two pronged strategy: The first is to do less. The financial leverage to crude at higher prices is unknown but large. That's going to keep stocks on the ropes.
Prong two of my gameplan is sticking to domestic retailers, ideally those with big online presence. With both coasts getting hammered by weather and protests being held across the country mall traffic is punk but consumers want to shop and shipping costs are low. No one really likes the retailers, especially in specialty.
That's good. Sell them to me lower. It's been a tough week but we're almost home. Buckle up and keep a tab open on Yahoo Finance, we'll walk you through this.
More from Yahoo Finance:
Hedge fund capital hits record $2.82 trillion even with horrible ‘14 returns
4Q profit estimates getting chopped and it's not just energy companies
Market slide setting up for Santa Claus rally