Prepare for an Oil Boom

Things couldn't get much worse for fossil fuels... The clean-energy revolution is reducing demand for oil and natural gas in the long term. Meanwhile, fears of a global recession are higher than ever... weighing on demand in the short term. [Chaikin PowerFeed]( Editor's note: The Power Gauge is as bearish as it gets on oil right now... And rightly so. So far in 2024, the energy sector is only up about 5% compared with the S&P 500 Index's roughly 21% gain. It's the [worst-performing sector this year](. But that doesn't mean it's going to stay down forever... Today, we're sharing an essay from our friend Brett Eversole over at our corporate affiliate Stansberry Research. It originally published in the September 26 edition of his free DailyWealth e-letter. In it, Brett explains why he thinks a turnaround in oil could be closer than many investors realize. It's a contrarian take – but Brett specializes in this kind of approach. And it's always good practice to listen to the other side of the analysis from smart folks in the room... Prepare for an Oil Boom By Brett Eversole, editor, Stansberry Research Things couldn't get much worse for fossil fuels... The clean-energy revolution is reducing demand for oil and natural gas in the long term. Meanwhile, fears of a global recession are higher than ever... weighing on demand in the short term. Put it all together, and it's a tough time to invest in energy. It's the worst-performing sector in 2024 so far. And oil prices recently hit their lowest point since 2021. Now, everyone has given up on oil. Sentiment recently fell to one of its lowest levels in recent history. But don't let that fool you... If history is any guide, a major rally is about to begin. Let me explain... Recommended Links: ['I Haven't Been This Worried Since 2007']( If the recent run-up in stocks following the Federal Reserve's historic rate cut has you feeling bullish... you're likely falling into a massive and dangerous trap. According to Joel Litman, the situation is far worse than almost anyone realizes... yet, it's the perfect time for ONE strategy – completely outside of stocks – that almost nobody knows about. [Full details here](. [How We'll Know the Exact Day This Bull Market Will End]( Porter Stansberry accurately predicted the world's largest mortgage brokers, Fannie Mae and Freddie Mac, were headed toward bankruptcy. He did the same with General Motors in January 2007. Today, he's warning about the No. 1 most dangerous investment in America... and THE one strategy anyone subscribing to financial research should implement immediately. [Stream Porter's market update here](. Commodity prices move based on supply and demand. But it's not just today's environment that counts – it's also the expected supply and demand in the future. The market is usually pretty good at guessing these things. But expectations can be wildly wrong at extremes. And when they are, you can set yourself up for profits as an investor. That's where the oil market is now. Folks have good reasons to be pessimistic. But today's level of pessimism is simply overkill when you compare it with history... We can see it by looking at the Commitment of Traders ("COT") report for oil. This weekly report shows us what futures traders are doing with their money. And when these folks are all betting in one direction, it's a strong contrarian signal. That's the exact situation we have today. Futures traders are near the most bearish we've seen in the past 15 years. Take a look... Futures traders are the most bearish they've been on oil since June 2023. And before then, we hadn't seen this kind of sentiment since 2010. Importantly, the chart shows that similar COT lows have a history of happening at bottoms for oil. And once the sentiment bottom is in, oil tends to soar. You can see what happened after the circled sentiment lows in the table below... The relationship here is clear... When futures traders give up on oil, a major rally begins. The only question is whether it will be a quick move higher or a multiyear surge. We've seen two rallies that each lasted more than 12 months. Those led to average gains of 96% for oil. The other three all lasted less than a year and led to average gains of 39%. Regardless, we know one thing for certain... Today's low oil prices and bearish sentiment won't last for long. And despite how crazy it seems today, history suggests we'll likely see $100 oil at some point in the next year. Few investors think that's possible today. But as a contrarian, you'd be smart to bet against the crowd... and bet on much higher oil prices. Good investing, Brett Eversole --------------------------------------------------------------- Editor's note: Brett consistently takes a contrarian approach to investing. And over at DailyWealth, he and his colleagues are always on the lookout for these kinds of setups to share with their readers. Just like the Chaikin PowerFeed, this e-letter publishes every weekday morning. And it's completely free to receive it. Learn more about signing up for DailyWealth [right here](. Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +0.04% 11 16 3 S&P 500 +0.42% 163 285 48 Nasdaq +0.26% 20 62 18 Small Caps +0.26% 599 967 356 Bonds -0.48% — According to the Chaikin Power Bar, Large Cap stocks and Small Cap stocks are Bullish. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Materials +2.02% Communication +1.77% Information Technology +1.65% Industrials +1.35% Discretionary +0.86% Utilities +0.56% Staples -0.11% Health Care -0.25% Financial -0.26% Real Estate -0.42% Energy -1.48% * * * * Industry Focus Aerospace & Defense Services 15 13 2 Over the past 6 months, the Aerospace & Defense subsector (XAR) has outperformed the S&P 500 by +2.56%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #7 of 21 subsectors and has moved up 1 slot over the past week. Top Stocks [rating] VVX V2X, Inc. [rating] CW Curtiss-Wright Corpo [rating] DCO Ducommun Incorporate * * * * Top Movers Gainers [rating] SOLV +3.18% [rating] GNRC +2.61% [rating] ISRG +2.52% [rating] CVS +2.44% [rating] FDX +2.29% Losers [rating] J -15.84% [rating] DLTR -3.83% [rating] ULTA -3.69% [rating] MU -3.53% [rating] GM -3.53% * * * * Earnings Report Reporting Today Rating Before Open After Close MKC, PAYX NKE LW No earnings reporting today. Earnings Surprises [rating] CCL Carnival Corporation & plc Q3 $1.27 Beat by $0.12 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. For questions about your account or to speak with customer service, call [+1 (877) 697-6783 (U.S.)](tel:18776976783), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized investment advice. © 2024 Chaikin Analytics, LLC. 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