Oil and stocks are moving almost identically with each other in the last few weeks. In fact, the correlations between the two are at nearly 100 percent, so it can't really get any higher than that, indicating a big turn could be on the way.
Specifically, according to data from Thomson Reuters, the 20-day rolling correlation between oil and the S&P 500 is at 0.96. The 50-day rolling correlation is at 0.90. A value of 1 would indicate that the two assets move in lockstep; -1 would indicate they move in completely opposite directions. Look at this chart of the correlation in the past year:
In the past 30 years, there have been levels sustained like this one time — in May 2012. In that case, stocks dropped about 10 percent in a month, while oil dropped from about $100 to $80 in the same time. The correlation broke when equities started to go back up as crude continued to slide.
That was typical of the other high-correlation examples we examined. Both assets fell until the stock market turned around. Here's a detailed example of how that worked in February 2013.
Similarly, last week CNBC.com reported that the stock market tends to rise after 2:30 p.m. ET — the moment that oil closes trading in the pits for the day. Equities have been in a tick-by-tick decline, but only in the hours that crude actually trades on the exchange. That 2:30-3:30 p.m. pop suggests equities want to rise up, if it wasn't for the psychological impact of oil bringing the entire market down.