So far, the commodities super cycle had been a crude oil opportunity. Yet, it turned out to only be a three-week opportunity, that’s it. The bullish sentiment surrounding commodities, especially crude oil, continued to live on for many more months, seducing investors to invest in the crude oil sector.

It was just an illusion, as bullish price action took over for only three weeks, but the perception continued on for many months -- until the rude awakening of last week’s crude oil breakdown. In our Momentum Investing research, we wrote on June 12 that both crude oil and energy stocks had topped, which, in hindsight, appeared to be an epic turning point observation.

What’s interesting about this current market environment is that the traditional intermarket correlation between the US dollar and commodities is broken. As we observed on this must-see bearish pattern on the US dollar chart, in recent weeks the commodities space did not move higher (with the exception of a relief rally in precious metals gold and silver).

The daily crude oil chart is now officially in a breakdown process. It violated $93/barrel, which was the line in the sand. It’s the price level that marked the breakout right after the Russia/Ukraine war started.

What’s interesting when looking at this chart is that the bull run in crude oil started in the second week of January. That’s six weeks before the war broke out. Did the market know more? Maybe, probably, presumably.

While the daily crude oil chart officially signals a ‘breakdown,’ we can see how the weekly crude oil chart is now officially ugly. Not only does the weekly chart confirm the breakdown on the daily chart, it also confirms the epic turning point and major (double) top in this market.

In the first week of June, we got a few premium members asking for recommendations to invest in energy stocks. We thoroughly checked the XLE ETF chart and concluded that it had set a top. On June 12, two days after the epic top was set, we wrote this in our Momentum Investing research service:

"We are not tempted to enter energy stocks. On the contrary, pending confirmation, we believe there is a potential topping pattern on the crude and XLE charts. XLE hit 93.31 June 6, a very powerful time/price combination, so it looks like a turning point. The arc setup on the XLE chart might be confirming this, also pending confirmation."

The above was our observation exactly two days after the top was set in the XLE ETF, when XLE was trading at 88 points. This is the recent XLE ETF chart:

So, why is it so important that we mention all this? Because news is lagging, and it is a big risk for investors to give news too much value. This is what financial media outlets were writing on exactly the same day that we called a top and a turning point:

"Energy has more room to rise, though. There’s still time to buy into the stocks, particularly for investors willing to consider the term 'energy' broadly. That means buying renewables-focused companies, too, and evaluating companies in part on their efforts to lower carbon emissions, a key trend going forward—and one that will be at least as big an economic driver in the longer term as traditional energy uses are today."

And another article continues:

"A months-long selloff finally culminated in stocks officially entering a bear market this week. But one area of the market is actually thriving."

"We’re heading back to the office and even traveling again, all of which entails using oil. 'We do have high demand for oil as economies continue to normalize and are recovering following the pandemic,' says David Sekera, chief U.S. market strategist for Morningstar. 'The market between oil supply and oil demand is very tight.'”

Fortunately, there is also a section in the latter article that mentions a money manager suggesting to take profits in the energy sector. But the point is this: financial news is lagging. Because of this, financial media will always miss the turning point. If you look at the crude oil and energy stocks charts, you can clearly see the turning points which were set around June 8.

At InvestingHaven, we include turning point analysis in our methodology. That’s why we were able to identify the turning points in both crude oil as well as energy stocks (through use of the XLE ETF) just a few days after it happened.

That’s why we never recommended our Momentum Investing members to get into energy stocks. Note that our top pick is a large-cap semiconductor stock that is growing tremendously fast in the automotive and clean energy sectors, which consume an exponentially higher number of chips. We like growth sectors, and we are fully invested in the mega super cycle of this decade (also, our top stock shortlist has only stock tips in this decade’s super cycle).

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