Traders can be caught out by waxing and waning correlations.

Take oil. For much of the year the US stock market has maintained a fairly tight — intraday — relationship with the price of crude as the fortunes of energy companies were used as a risk appetite proxy.

But the finished last week near record highs having surged at a time when West Texas Intermediate crude, the US benchmark, dribbled back to two-month lows after relinquishing the $50 a barrel level.

The S&P 500/WTI 20-day correlation was minus 11 mid-session on Monday, down from positive 85 a month ago, according to Reuters calculations.

If equity investors think that tight positive relationship will return then they should be wary about signals from the energy sector right now.

Reuters also calculates that hedge funds have cut the number of bullish bets on US oil prices to the lowest level in nearly four months.

Speculators appear concerned that the rebound in prices off February’s 12-year low around $26 a barrel has encouraged some marginal US producers to reboot output.

Data released at the end of last week showed US drillers added oil rigs for a fifth week out of the last six.

Stockpiles remain high as meek global demand fails to cause much of a drawdown.

WTI fell nearly 5 per cent last Thursday after US inventories fell by less than forecast.

Can the stock market’s bullish run survive another oil price relapse?