As Oil Prices Collapse Anew, Stocks of US Energy and Oil Exploration Firms Crash!

So the US stock markets isn’t invulnerable to market crashes after all.

As I have been saying, since October, market crashes have become real time. Most importantly, incidences of global market crashes has been spreading.

Prices of both US and Europe’s oil benchmarks continues to plummet, falling by over 3% last night. OPEC projects that demand for oil will be the weakest in 12 years. But this hasn't just been about oil. Commodity prices in general has been sluggish as seen by the CRB index or even in Industrial metal stocks (GYX)

Meanwhile, crashing oil prices has also prompted the S&P Oil and Gas exploration (XOP) benchmark to a 4.79% meltdown last night!

The carnage in the energy sector (XLE) led last night’s selling pressure.

Even the bullish Bespoke Invest admits: "The S&P 500 Energy sector has now fallen 25% from its peak nearly six months ago, while the S&P 500 Oil Exploration and Production group has fallen even more at -45%.  If you want to label it a crash, be our guest." 

The energy sector's meltdown spread to the general market.

Will the energy sector, particularly the shale industry, serve as the causa proxima to a financial crisis?

Remember these crashes comes in the face of ECB-BoJ-PBoC easing which seems to indicate that the ecstatic phase of the stimulus seems to have already faded.

And those who buy into the “immunity”, “decoupling” and G-R-O-W-T-H thesis will soon be surprised when crashes becomes THE general market condition.

History tells us that the obverse side of EVERY mania is a CRASH, central Bank Put notwithstanding!