Markets are a forward-looking discounting mechanism, and this week was a perfect example.
After weeks of rising geopolitical tension, the Strait of Hormuz, the world’s most important oil chokepoint, reopened to tanker traffic.
That single development was enough to unwind a massive amount of fear premium that had been built into the energy complex.
Heating Oil dropped more than 10%, and Crude Oil fell nearly 9%. Even Gasoline, which has been showing notable relative strength, still declined roughly 5%.
On the surface, it looked like the story had changed in the blink of an eye.
But the charts tell a different story...
Because energy stocks had already been correcting for weeks.
After an unprecedented run of 14 consecutive up weeks, the Energy Sector $XLE peaked at the end of March and quietly pulled back about 15% before this news even hit.
In other words, the stock market was already discounting a shift in the narrative.
Now, price is sitting right where it matters most.
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The XLE is retesting the volume-weighted average price, anchored to the late-2025 lows, the level that preceded the historic rally we saw in Q1.
This is the line in the sand. If buyers are going to step in and defend this trend, it'll happen here.
And we think that's exactly what's about to happen because nothing about this looks like a top.
It looks like a reset after a historic move.
At the same time, the U.S. Dollar is telling a similar story.
After pulling back alongside energy over the past few weeks, the dollar is now sitting at a key level of former resistance, one that’s attempting to flip into support.
If XLE is going to catch a bid here, we expect the dollar to do the same. These two have been moving together, and the odds favor the positive correlation remaining in place.
So while everyone is focused on the headline-driven selloff in energy…
We’re looking at what’s working.
And right now, that’s metals.
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Jason Perz, Sam Gatlin, and JC Parets just went live for Making Money From Inflation, and the replay is now available.
They break down where energy is headed next, what’s setting up behind this move, and the position sizing framework that separates winners from everyone else in commodity cycles.
Watch the replay here.
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Sam Gatlin and Jason Perz | Supercycle Stocks | Save The Bees
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