Last week I wrote about the rally we have seen in the stock market. At the time, oil had dropped $18 to $129 per barrel, and the Dow 30 was up 600 points in just 4 days.
I felt at the time that the stock market was up in a relief rally, celebrating the pull back in oil.
Well, oil has continued to fall, while the stock market rally has lost it's steam.
Oil is currently trading at $124 per barrel, while the Dow is currently trading at 11180, off 400 points from it's recent high.
What's going on? Who knows, I am just a Realtor!!!:)
But I have a guess.
Oil is still too high. It will settle out around $70 per barrel sometime in the next two years.
As far as the stock market, if you are a long term investor (and you should be), then you should be dollar cost averaging into diversified mutual funds. Over time, the markets will reward you for your patience.
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