Market watcher Dennis Gartman says continued strength in oil is a bad omen for stocks.
"If [crude oil] spot prices were to go to $40, I think that would be detrimental to shares on balance, yes," the editor of the Gartman Letter told CNBC's "Fast Money" on Monday. "If you take a look at longer term perspectives and longer term relationships, crude and stock prices move in contravention, not correlation to each other."
Crude oil has rallied 39 percent from its February low. On Monday, it settled up 5 percent to its highest level of 2016.
But it isn't quite that simple.
A strong economy, strengthened by low oil prices, pulls away money from the stock market, Gartman said.
According to Gartman, after several years of the economy and the market moving in tandem, we are now at a point when stocks and the economy have diverged. The S&P 500 has fallen 6 percent since its May high of 2,130, a level Gartman believes marked the start of the divergence.
He says one of the biggest contributing factors to the economy's stability are stable crude prices, which have traded between $27 and $49 a barrel since July. Cheaper crude means low, level gasoline prices. And low gas prices makes consumers more confident.
"As the economy gets very strong and as the monetary authorities begin to tighten policy, capital comes out of the equity market and makes its way into plant and equipment," Gartman said. "Stocks begin to weaken while the economy moves to new highs."
In the final phase of this cycle, the economy runs on all cylinders and the Fed begins to tighten monetary policy, causing economic weakening and pushing stocks lower until the market bottoms, Gartman said.
"I'm not short the market long term now," said Gartman. "But I may be a few months from now."
Crude oil settled at $37.90 on Monday. With crude at that level, Gartman is neither long or short on oil because he believes it will remain $4 on either side of $37 for at least the next six months.