The Most Important Oil Chart in 2025

If you have been following for while, you know I consider this chart to be the most important of all the ones I have created. Oil divided by the S&P 500 or Large Cap U.S. Equities.

I use it to call the peaks and bottoms in the cycles.

These cycles alternate price leadership every 12–13 years.

I truly do believe we made another major bottom in April 2020, and for two years, that call proved correct through June 2022.

Since then, we have been facing an uphill battle—or perhaps I should say a downhill slide, as the Oil-to-S&P ratio has trended downward.

I transformed the above chart into a zoomed-in version starting from 1949 and found a regular pattern that occurs:

Step 1 - A bottom is put in.
Step 2 - The downtrend is broken, and a higher high is established.
Step 3 - A long series of higher highs.
Step 4 - The peak is put in, and few notice it.
Step 5 - Oil-to-S&P rallies but fails to break through the peak, signaling to jump ship.
Step 6 - A long series of lower highs and lower lows.

Rinse and repeat.