🗞 The Signal Wall Street is Watching (But You Haven't Seen Yet)

WHILE YOU POUR THE JOE… ☕️

I’m going back to this chart because it will be my main theme going into 2026.

Correlations between the DXY dollar index and crude oil futures are swinging higher every quarter since the breakout of 2023, and this previous newsletter tells you some of the reasons why this is the case.

Here’s what I will show you today:

• Exactly why the dollar will rally next year

• A Single long/short equity trade you can ride for the entire cycle

• The #1 stock pick I have made in energy with 60%+ upside

I know I talked about the one chart Wall Street is watching, and it isn’t the oil-to-dollar correlations. 👀 

It’s actually the spread between two of the largest banking stocks in the United States.

And right now, this ratio just triggered a major implication for the economy and markets.

Last time this happened was in 2022, and the S&P 500 went up by 96% since then. 🔥 

Speaking of triggers, let’s get on with today’s email 📧…

CUTTING OUT THE NOISE
Clear as Day

Commercial traders, meaning banks and hedge funds, are now net short on the dollar index. 🐻 

This has happened three times since 2014, so I guess it’s pretty meaningful.

What’s more meaningful is the fact that a rally always follows after positions swing into this current balance, and that’s the foundation for today’s macro view.

Stanley Druckenmiller’s top advice is to always imagine what the world will look like six months from now, and trade according to that view.

The guy has beaten Warren Buffett at his own game, it can’t hurt to follow his thinking here.

This is what can confirm a dollar rally in 2026:

• No more rate cuts from the Fed, while other G7 nations keep cutting

• A rebound in the Services PMI index for the United States

• The ensuing oil rally supporting economic activity expansion

So far, we have one out of three.

Here’s where we could get the other two. ⬇️ 

The One Chart

Wall Street loves to make decisions based on ratios, and this is one of the most important ones.

Keeping a ratio between J.P. Morgan Chase and Goldman Sachs is a pretty reliable way to predict where the services PMI and the business cycle could be headed next.

Notice that the ratio bottomed out in October 2022 along with the S&P 500.

Again, 96% returns since then.

Here’s why:

• JPM is a more defensive name in banking, outperforming when the business cycle is weaker due to its commercial and consumer banking exposure

• GS is a pure investment banking play, heavily exposed to M&A dealmaking, which is also tied to the future economic sentiment

So,

A bottom in the ratio means GS is outperforming; therefore, economic sentiment/outlooks are extremely bullish. 📈 

A topping in the ratio means JPM is outperforming, signaling a more bearish outlook on the markets and the economy.

Now for the cherry on top.

Notice how, when the JPM/GS ratio rises, so does the services PMI.

This is 100% aligned to the defensive factor in the JPM outperformance, because the heaviest industries in the services PMI are defensive in nature.

Like:

• Healthcare Services

• Finance & Insurance

• Real Estate Renting & Leasing

These are also closely tied to the dollar’s performance, so it is reasonable to expect a weaker dollar alongside a bottoming JPM/GS ratio and a weakening PMI index.

But, that’s all about to change now.

Given the current ratio and its significant standard deviation, I would expect JPM to begin outperforming GS for all of 2026.

That means:

• A stronger DXY

• Rebound in Services PMI

• Trillions of dollars rotating into other areas

Like oil.

Bottlenecks All Over 

The oil industry is now operating at 88% capacity.

This should be good for operators in the space, considering demand for oil is still ongoing even with cyclically tight supply.

Yet most in the space are suffering from anemic gross margins and bearish price action.

The sentiment for energy is so bad that it only makes up 2.8% of the entire S&P 500 index.

It all sounds like a rotation is long overdue, but now we have the right trigger in that JPM/GS ratio.

At 88% capacity utilization, demand for oil on an economic activity comeback is going to create a lot of millionaires who are positioned in oil names right now.

But not just any oil name.

Last week, I sent out an entire research report on my #1 oil stock pick to knock it out of the park with this current theme.

A $3 billion company with $9 billion in net asset value.

That’s a 3x on a worst-case scenario. 💰️ 

The market is paying a massive forward P/E premium for the stock, despite terrible fundamentals, and there’s a reason why.

• They just received a massive insurance payout, allowing them to reopen a few refining plants

Which is why Wall Street expects to see over 50% EPS growth for the next two years.

Even that seems conservative, knowing that the oil rally is now just around the corner.

Here’s what this all means for you.

After this breakdown, we both know you will never get this level of research quality anywhere else. I know you feel like you have a real Goldman Sachs analyst right in your pocket.

It’s because you do.

Now let me do you one better.

Each and every deal I take for my own account and those I manage for others can be yours, with financial/valuation models included.

Live trade and portfolio management, access to me for Q&A sessions, and a lot more.

Here’s the best part:

• You can get 7 Days Free Access right now

Most members end up 10x’ing their membership fee BEFORE it’s even due.

You know what to do, do it now ⬇️ 

To your success,

G 🫰