NEW YORK (TheStreet) -- There's been an inverse correlation working between the oil market and the stock market. Oil goes up and stocks come down. To the uninitiated, this would seem to make a lot of intuitive sense. After all, 48% of all the stocks on the NYSE are either directly related to oil or have energy as their primary input cost. Of course, it makes total sense that high oil prices would negatively affect stocks.But the reality is that this is not the way it has been working. In fact, over the last several years, oil and stocks have been moving in tandem, so closely that if you put up a daily chart of oil next to a daily chart of the S&P 500 without labels, you'd be hard pressed to tell them apart (see chart below). As I outline in my upcoming book, Oil's Endless Bid due out from John Wiley and Sons in a few weeks, oil has become "just" another asset class, moved primarily by the amount of capital flowing into and out of it. In this way, it has mirrored the motion of stocks: As money looks to invest, it flows into oil just as easily as it flows into equities. But recently, with oil moving decisively over $100 a barrel, oil has worked as it has intended, as a hard asset hedge against other paper assets and as a diversifier from more traditional investment in stocks and bonds. But my guess is this inverse relationship just won't hold. We've seen a lot of hand wringing about the negative impact that over $100 oil prices will have on the recovery and the economy at large. An equal amount of speculation as has gone into oil has been spent on the television trying to come up with an oil price where the economy is entirely derailed, we sink back into recession, the recovery stalls and, I suppose, the world ceases to spin.
There is a price where this happens, there has to be -- but the experience of 2008 says that the economy is capable of withstanding $100 oil while continuing to move forward. We must remember that the average barrel price for 2010 was already over $75, and few analysts thought that this burden, even in the midst of a global recession, was a reason to doubt the ability of the U.S. to recover. Now, with recovery signs even more firmly apparent and with the relative small demand destruction we saw in oil in 2008 as it streaked ever higher toward $150 a barrel, it is far more likely that stocks will again resume their parallel motion with the price of crude.In short, that makes these mini swoons in the stock market great opportunities to pick up some shares at decent prices -- especially shares that benefit more from a rising oil price. Even if relative calm comes for a while to the Middle East, a new layer of investor money has come to oil that won't easily be shaken out. I'm betting that money will also filter into the oil stocks. For those of you who consistently read my columns, my recommendations will come as no surprise: ExxonMobil ( XOM - Get Report), still the best of breed in the large integrated oil space, Weatherford ( WFT) an underperforming oil services company that was unreasonably cheapened by an accounting glitch a week ago and Apache ( APA - Get Report), perhaps the cheapest international oil and gas company out there, also unreasonably cheapened by the unrest last month in Egypt and a tremendous value today. Bet on the trend of oil and stocks resuming parallel trajectories. And my bet is that stocks will more likely be catching up to oil, as opposed to oil coming down to meet stocks. At the time of publication, Dicker owned XOM, WFT and APA.