There is a great combinations of crude oil and stock market as major world economy are based upon crude oil and US dollars.
If we take example of last 40 days crude oil has come down approximately 22% and Sensex has shoot up around 23%. It is easy to understand that crude oil is directly link with inflations and crude oil having an inverse relationship but relationship between crude oil and Sensex is not so easy.
If you look at past history Indian stock market has started to shooting up around May 2003 to Dec 2007 As per statistic around 550% gain has been registered on monthly closing levels which has come down to 270% if we take 52 weeks levels. Now look at crude oil statistics Crude oil started his upward journey from US$ 25 in April 2003, in Dec 2007 it was below $100 and gone up it's all time highest levels$146 in June 2008 still Indian stock market was keep shooting up like rocket till Dec 2007inpite of around gain of crude oil ($25 to $95 till Dec 07), what is this all about? How we can relate price of crude oil and Sensex always and every time? If crude oil has gained it all time high then oil producing companies should also share success story of crude oil shoot up at world levels. If you look at their balance sheets of all major oil companies at world levels gain have not been registered because of US dollars depreciations.
It is us dollar and crude oil both to decide to market trend.Fortunetly last couple of weeks crude oil has shown big dip and Us dollars shown big gain against Euro, result is with us Stock market up by 23% in few weeks.(5-6 weeks time ) Now it is advise to book profit 70% of delivery calls .If you remember that during first week of July 2008 we have recommended to invest in selected 16 stocks for 45 days now 45 days are over time to book profit .