Welcome back Chronicle Crew.
It was 2011, I was at my desk looking at my charts and said to myself.
“The cycle is over."
If I am being honest with you, I didn't fully trust my instruments and instead relied on an strategy that NEVER works….hope.
A couple years later, commodities were officially in a bear market and I was let go from my job.
Don’t feel sorry, that’s not why I am writing this.
Experience is what you get when you don’t get what you want.
These are a collection of charts to time the next secular top in energy and commodities that I am keeping an eye on.
This first one is a repeat of last week’s post (HERE) so I will be brief.
Energy cycles, move in 6 stages:
Stage 1: War ends, new supply comes online, demand slows and oil capitulates.
Stage 2: There is a period of instability in oil producing regions.
Stage 3: Low capital spending and industry consolidation.
Stage 4: Debasement of the currency
Stage 5: A new demand hub emerges & a global conflict begins.
Stage 6: A “Hubbard Peak” fear of supply running out, prices goes parabolic along with capex
Then back to stage 1 to play out again.
Below is a table of the parallels in history.
#1 - My Roadmap for the cycles. There are 6 stages in every cycle. We are in stage 5
This next chart is my north star.
My first commandment.
It’s simply the price of oil divided by the S&P500 index on a monthly basis since the beginning of the industry.
#2 - Watch oil divided by the S&P 500.
Let’s stay on this chart for a second, a couple things to dissect.
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