Why 2:30 starts the most important hour of the day

Amid the stock market's rapid decline, some traders have started noticing consistent reversals in the afternoon, usually starting around 2:30 p.m. ET and lasting for the next hour. Here's an animation of the difference between December and January intraday performance of the S&P 500.

The second-to-last week of December showed a consistent move up — few surprises during the day.

Then the final week of December saw a shaky day. The market started low, rose until the afternoon, and then collapsed late. That led the way for January's collapse, but the shape of the chart has been inverted.

The first three weeks of January have seen declines, but generally speaking there has been a rise around 10 a.m. ET, and then another one after 2:30 p.m. Wednesday's move in the markets was another example of that, seeing an afternoon rise, briefly bringing stocks closer to an unchanged day. After plummeting 566 points, the Dow swung higher and ended the day down 249 points. The Nasdaq composite actually gained 1.5 percent.

Many traders think this is all about oil. In the past 20 days, stocks and oil have a 96% correlation - its highest level in four years. Oil's decline during the day spooks traders, bringing down other markets. When the oil market closes at 2:30 p.m. ET, it gives a sigh of relief, and stocks can begin trading as they normally would, without the giant psychological overhang of oil in their screens and daily profit and loss statements. This will be a trend to watch in the upcoming weeks.