Oil price moves have become the key driver of equities: The 10-day correlation between the S&P 500 and WTI Crude Oil futures is down to -0.6, the most negative reading since October. This means that as oil prices surge, stocks decline, and vice versa. Historically, this pattern holds during geopolitical conflicts, with stocks negatively correlated with oil in 6 out of last 8 major events. The longer a conflict lasts and the higher oil prices rise, the deeper the equity drawdown. The worst S&P 500 drawdowns were -19.3% during the 2011 Libyan Revolution and -15.9% during the 1990 Gulf War. This comes as oil prices rallied as much as +36% in 2011 and +130% in 1990. Oil is the single most important asset to watch right now.