Relative strength, absolute conviction: reading oil’s rise before it happened

Were there clues for investors that an oil price spike was on the horizon in 2026?

Well, let’s start from the top…

JPMorgan, the world’s leading global financial firm and the largest bank in the US, has over $3.3 trillion in assets, so it should be well-versed in the art of forecasting. 

But did this investment giant have some inside cues about what was set to happen to oil prices?

Here's its forecast, just prior to war breaking out in Iran:

Note the date, JP Morgan was bearish on oil, even in the last hours before oil made some of its most rapid advances ever.

And to be fair, who really could have predicted the volatility that’s happened since?

But if you’ve been a regular reader, you’ll know we've been bullish about the traditional energy market for several months.

In fact, here’s a bullish case I made for oil in a Liverwire update just weeks before war broke out in Iran: Oil: Only One Trade Matters.

While that piece didn’t specifically note the Middle East as the catalyst for higher prices, it did point to the geopolitical vulnerabilities underlying the world’s most important resource.

So, why were we bullish on oil?

Back in February, I put together a report for my paid readership group on the case for owning traditional energy stocks. The core theme underlying this report was the relative strength being displayed by this sector. 

Here’s a snippet from that report, which was issued in February 2026:

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Narratives, outlooks, and supply forecasts often paint a very different picture than ‘price action.’

That’s why I believe the world’s ‘experts’ will be proven wrong on the trajectory of energy prices this year, especially within the oil and gas market.

In fact, this sector is already demonstrating some clear signs of strength.

How so?

Whether you’re looking at a company or a sector, one of the most useful guides for identifying future leaders is to focus on something called relative strength.

What do I mean?

Let’s put it this way: emerging bull sectors tend to decline LESS during market-wide sell-offs.

That’s why corrections can be incredibly useful in pinpointing where future strength sits in the market.

There are always opportunities; it’s just a matter of having strategies to identify them, and ‘relative strength’ is one such strategy.

So, with that in mind, how did the traditional energy market fare in the last market-wide sell-off? I’m referring to the sell-down that started in late January.

Let’s find out…

Here’s a chart comparing the Nasdaq 100 Total Return Index (orange) versus the iShares Global Energy ETF [NYSE: IXC], shown as purple:

[Price action from January to February 2026]:

The Nasdaq 100 is made up of the world’s largest tech firms, like Google, Apple, Nvidia, and Amazon. Meanwhile, the Global Energy ETF comprises oil giants such as Exxon, Chevron, BP, and Shell.

Two completely different sectors, which could be on very different long-term trajectories.

Tech has been the market leader for the past several years. That’s why I’ve used it as the bellwether on this chart, a gauge to measure the relative strength in other sectors, in this case, the energy market.

So, what does it show?

Referring back to the chart above, you’ll note that the iShares Global Energy ETF hasn’t just held firm; it has surged against investor uncertainty.

The energy ETF is up almost 16.8% this year, while tech remains flat.

This could be our first important clue that the energy market is starting to show compelling ‘relative strength’.

As I detailed in your December recommendation, energy should be your focus as we head into 2026.

And that forecast has only strengthened on the back of this latest market action.

It’s why I firmly believe the tide is finally turning in the traditional energy market.

Now’s the time to deploy our strategy and build exposure.

That’s what the price action is telling us.

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JPMorgan didn’t pick it.

The world’s leading authority on oil and gas markets, the International Energy Agency (IEA), didn’t pick it.

Very few market ‘expert’ insiders were bullish on oil for 2026.

Most were downright bearish.

And throughout that time, I was recommending a bunch of traditional energy plays to my paid readership group.

This was the ultimate contrarian play; it was timely, and it has served as an excellent hedge for our portfolio against major market volatility.

So, while the biggest moves in the oil trade might be behind us now, other opportunities are emerging…

If you want a front-row seat to see where I think that could emerge, you can check out more of my work here.

This is where you can put knowledge into action by following our model portfolio.