The market has rejoiced at the "collapse" of oil prices to $120 a barrel. This enthusiasm is misplaced. $120 oil is still astonishingly expensive.

$120 oil may mute some of the damage that a sustained $150 oil price may have inflicted, but $120 oil will still choke the economy. Even if oil fell to $70 tomorrow, moreover, the economy won't turn on a dime--especially with the housing and debt markets still cratering. If oil stays where it is, meanwhile, or drops to $100, the demand will still likely be curtailed.

And besides, the reason oil is falling is negative: global economic collapse generally isn't good for stocks. At some point, the market will likely wake up and realize this.

See Also:

Who's Responsible For $150 Oil? A List of the Actual Villains