Energy Trends

- Nearly all men can stand adversity, but if you want to test his character, give him power.

- Abraham Lincoln

New Players

We all know the teams that comprise the energy oil sector. The world has national firms while the US has individual giants. Then, there is OPEC, but it is losing its influence. Teams that are not allowed into the global league are Russia and Iran. There are fringe teams like China, Venezuela, et al. 

While we have a fairly accurate amount of barrels produced daily and used daily, the stats change with supply and demand. It is no secret that the Hormuz Strait is central. The US/Israel vs. Iran conflict has damaged global needs. The US policy caused the problem. The initial deficits in oil supply caused a severe shock to the global oil league. However, supply passing through the strait is climbing. It is now 16- million barrels of oil per day (BPD). The old level is 24-million. 

Richer nations like the US and China had a national reserve while the remaining nations used their alternative sources. The conflict may continue, but behind the scenes, the smart teams are preparing for the future. We see a new pipeline in the region. Trump is so wrong to be against wind and solar, but that discussion is for another time. There are some "free agents" out there and they will change the energy league in the future.

Enter...

...Amazon has worked three nuclear deals this past year and it is not over yet. They want power for their AI data centers.

Microsoft is pushing to revive Three Mile Island nuclear plant.

Google is seeking partners in small, nuclear reactors. Meta is in the same market.

Beside being tech firms, they have something else in common. A quest for energy, specifically, nuclear. The US energy grid is short capacity. It will need an additional 35 gigawatts of electricity by 2030. 

Digress

Amazon signed a nuclear deal with Energy Northwest in Washington. They covered the South with Dominion of Virginia. It made a partnership with X-Energy to build more than 5 gigawatts of new, small nuclear power by 2039. Microsoft signed a 20-year PPA to take all the output of Three Mile Island. This will cover its data centers in Pennsylvania, Chicago, Virginia, and Ohio. These tech firms are developing their own source of power. Soon, their league will have Google and Meta energy firms.

Oil League

OPEC was once its king, but it is no longer number one. The US leads the world in oil production with 13.8 million bpd. and climbing. OPEC is removing its oil cuts. There will be more oil available in the future, but things change quickly. The suggested "toll" on the strait will only cause more conflict. It will not happen. So, where does the price of oil go? The charts indicate a rising price pattern. Brent started at $72 with a recent high at $95. We see some type of consolidation. WTIC, also shows a rising price channel. The low at $67 and its recent high at $92. It too will find a range. This will pertain to demand. The "old" level of 104-105 million bpd is the basis for oil's price action. The conflict is subject to politics. This is never good. There are a few wildcards. China's connection to Iran. Russia supplying oil to China and India and gas to Germany for winter. The new US policy with Venezuela. Politics is never good.

Related

US and world consumers get hurt with rising oil prices. In addition, necessities like food rise through shipping and production costs. The biggest unmentioned costs in the US is mortgage rates. In February, the 30-year rate was 5.99%. On Monday, it was 6.87%. This is 10% higher and consumers pay this rise in cost for 30-years...Peace.

Odds and Ends: August 2026

- It's not what you look at that matters, it is what you see.

- Henry David Thoreau

Treasury Secretary,

Scott Bessent is the poster child for the elite. The stupidest and most risky thing that you can do with your money is to enter currency. The secretary just wasted millions, no billions of our taxpayer money to prop up the Japanese currency. By doing this, you get a few days of relief with international trading, but whatever the trend was and the reasons behind it, will resurface. Bessent attempts to catch a falling knife.

It gets worse...

Since the Federal Reserve did not lower our interest rate, Bessent enacted his own form of QE. He wastes billions more of our taxes to buy "old" long-term bonds to lower rates. How stupid is that? He spends borrowed money to buy notes that used borrowed money (can you say, rollover) to present an economic picture that all is well. Is this what they teach (Yale) in the Ivy League? It is no wonder how our national deficit ballooned past $40 trillion and counting...He goes on to say these famous last words, "Most probably (expression to cover his ass), our budget deficit under President Trump has peaked."

Repercussions

The world will stop buying our debt because they will see that the BS of Republican Conservatism is just that, talk. They also see our debt growing at 7% while our economy shrinks. At that debt rate, it will only take 5 years to reach $50 trillion. That is doo-do land.

 Related

The government is changing its inflation formula, again. It takes effect in September, but the propaganda of lower inflation won't hit the news until next year. People will forget the manipulation to present a better picture. Maybe they will stop saying that breakfast is the most important meal? Why, you ask? Because inflation has hit: eggs, OJ, coffee, half-and-half/milk and bread. Breakfast is expensive.

AI Risk Growing

Broadcom (AVGO) is investing $60 billion in Anthropic's AI platform. Of course, they have to borrow that money which lowers their stock price and get this, they only get a first tranche share. This implies how excessive data centers and AI cost. These AI firms are throwing out money like leaves falling from trees. This is an example of excessive leverage. These type of investments ring the sorrows of the financial crisis of 2008. We already told you about Nvidia with its $225 billion in bonds (debt). However, we have other, new, smaller AI firms that are jumping on the bandwagon. They all are using leverage and going deep into debt. Tera Wulf (WULF) has over 3,000% of shareholder equity in debt. Nebius Group (NBIS) over 106% of shareholder equity in debt. Core Weave (CRWV) reported $46 billion of debt in the 2cd. quarter. None of these firms look economically stable.

Power Grid Problem

Instead of using our taxpayer money wisely like helping the power grid, our leaders only live for today's news. Well, the news for tomorrow is bleak according to CEOs in battery storage. They are saying, "We lack transformers, infrastructure and transmission lines to handle all the extra power that we need, especially with stored energy. We cannot move energy in both directions."

Sad, Shout-out...

...the passing of Father Benedict Chao in Hong Kong at 108. The Trappist monk helped all through the horrors of the Japanese occupation in WWII and the horrors of the Communist Chinese after 1949. Open the gates before him. Rest in peace...

Some Positives

Singapore needs hosing. They lack land. Wisely, instead of stripping its small forest land area, they are trying a new approach. They will attempt to make "manmade islands" designed for housing offshore. We hope it works and provides a blueprint for the world. Maybe they could raise investment money from the TNC ( The Nature Conservatory)?

Past Example

The Seychelles is a small group of islands a 1,000 milles off of Africa in the Indian Ocean. The TNC loaned them the money to maintain the natural features of their islands. This was one of the first bonds for nature. They used some of the money to develop tourism for their small population (100,000) and they are doing well. Very smart...Peace. 

Wrong!

- Sometimes you win, sometimes you lose and sometimes the blues get hold of you...

- Carole King, Sweet Seasons

Countdown @ 0...

Our call for a market correction after the Fourth of July holiday is a zip, zero, and maybe because it is so wrong, a negative? A recap not only shows the market rally continuing, but establishing new record highs in the Industrials and S&P 500. The only divergence comes from the Transports. It did rise, but it never came close to testing its last high. This is like an honorable mention for not making an all-star team. We were not alone as many analysts like the Oxford Club declared what we said. The most notable being the Big Short, Michael Burry. We can cry in our beer as the Bulls drink champagne. As for you, our Dear Readers, we find ourselves under restless nights. Our conscious won't let us sleep. This is why we rarely mention individual firms because if we are wrong, we might have caused you financial harm. With that said, this is the scoreboard as of last Friday.

Industrials = Closed at 53,732. This is over 1,000 points higher from our call date. Although the index was down for the week, don't be fooled. During the period it set a new record high with momentum.

S&P 500 = Closed at 7785. This is up over 200 points and along the way, it too, set a new all-time high.

Transports = Closed at 21,792. Around 400 points higher, but never came close to testing its last high.

NASDAQ = Closed at 26,729. This is 1,200 points higher and hanging at its high.

Russell = Closed at 305. The small cap index only rose 10 points and it had extremely low volume. This is like a consolation prize. If the market were to correct, say late September or October, this index would be the first to show a decline. If after the consecutive down days this week, one might think it coud be just the timing? The last word on that would be if the market tested and pierced the March low. With that said, we, at Evolution made the wrong call.

Related

Sometimes President Trump does some good things and sometimes some really stupid things like last week. He stated that he would not allow the Transparency Act of 2021 to be enforced. This act says firms must report all details. By doing this, he allows "zombie firms" to continue to operate and that can hurt a lot of people. The big boys love it like Nvidia which has issued $225 billion in bonds with no transparency. They are hiding the true cost for data centers and AI along with Amazon, Google, Meta and et al. Leverage and its overuse is why banks and firms collapse. Not good...Peace.

Countdown: 2,1...

- An investment in knowledge always pays the best interest.

- Benjamin Franklin

Last Two Weeks

The market's action last week shouts loudly that our call for a correction is wrong. The only consolation is that we have one more week in our outlook. With the Industrials and S&P 500 each claiming a new record high and Nasdaq rising over 1,000 points, it seems all over but the crying. With that said, the market is not in full harmony. According to Dow Theory, all three indexes must be in accord. The Transports were up last Friday, but still down for the week. The only index with subpar volume was the transports. At the moment, the bulls are in control. They do not worry about the over leverage spending on AI and data centers by high tech. They have forgotten the red flags posted by private credit market. They are escaping the summer heat by swimming in their profits and placing bets on the "souless" Polymarket platform. 

Behind the Scene...

...As always the revisions by the BLS are never shouted or even hardly mentioned. They confirm what we saw in making our correction call. Jobs were revised DOWN for April, May, June and July. They even had the audacity to say that unemplyment fell to 4.1%. They present their data like a puzzle. The central piece falls with the lack in their research of hearing people say, "I cannot find a job." What the sentence lacks is this continuation, "Cannot find a job...that pays a living wage."

Related

Our Treasury secretary, Scott Bessent says, "The K-shaped" economy is over." He means lower income levels are regaining footing. We see this as funny since he never mentioned the "K-shape" economy before and like the last Fed Chair, Powell, no idea or lying about "transitory" in reference to inflation. 

In addition...

Facts are being gathered about failing businesses in America. Bankruptcies in major firms (those worth over one billion) are rising to alarming levels. There were 785 such firms in bankruptcy court in 2025. We read where Walgreens and Staple's are closing stores and Wendy's saw its revenue shrink for six consecutive quarters

Lastly,

Keep an eye on the dollar. It fell hard last week and it is under 100. Resistance is at 98, but after that the 96/95 range is possible. Even if it stays range bound at its present level, inflation will pick-up. Gas is up as well as mortgage rates. This is not good for summer trips to a water hole or seeking a home before school starts. Our countdown ends next week. so far, our call is looking poorly...Peace

Countdown: 3, 2...

- A 1,000 point drop, a 1,000 point gain leads to foreboding and foreshadowing.

- Sebastian, Evolution of Democracy

Rocky Road

It maybe hot enough that you think of ice cream. We like Rocky Road, but not in the market. As our countdown nears completion, the market reversed. Last Wednesday, our call for a correction was looking good until Thursday. The market reversed. Is the rally still on? Is our call wrong? This is the picture that the stats gave us.

S&P 500 low was 7316 on heavy volume on Wednesday. It closed up last Friday to 7489. Reversal? Yes and no. Although the index was up for the week and broke above its previous support at 7473, the S&P 500 was down for the month. The volume was good. This is two months in a row of a down trend. Foreboding and foreshadowing...  

Industrials offer a similar picture. On Wednesday, they fell to 51,594. Last Friday, they closed up at 52,485. The volume was strong. However, this index fell for the month. The second straight down month.

The Transports had a down week. Although the volume was light, the price decline was severe. The index fell over 1400 points for the week. It too fell two straight months.

Nasdaq was the most volatile. On Wednesday, it fell to 24,442. It closed on Friday at 25,373. The monthly volume was heavy and like the other two indexes, it fell for the second month in a row.

The small cap, Russell was neutral for the week. It was down for the month, but unlike the other indexes, this index was up in June. However, it was down in May. 

What It Means?

There is no conclusive aspect and the countdown has two more weeks. We sampled some of the market leaders. It gives the same confusing answer. 

Apple: This stock hit a new, all-time high, but failed to hold price. For the month it was up, but it fell hard last week on heavy volume.

Meta: Looks like it is collapsing. It was 740 in February and last Friday it was 556.

Google (Alphabet): It was down for the month and fifty points below its June high.

Microsoft: This tech leader shot higher than a Musk rocket. It was up 83 points for the week on good volume. It was up for the month.

Micron: The chipmaker fell like one of the booster rockets falling off a rocket. It was down for the month with heavy volume.

Sandisk: It continues to fall in price. It fell 221 points for the week with a down month.

Amazon: Bezo makes rockets too. His firm exploded for the month from 235 to 271. Problem. There is a huge gap in price and gaps generally get filled.

Bottom line: A new month and the first week is very important and telling. What is the market foreboding and foreshadowing? We will see says the blind man...Peace.

Odds and Ends: July 2026

- When things go wrong don't follow them.

- Elvis Presley

Countdown Continues... 4, 3...

We continue our countdown call. Last week all the indexes fell, however there was little conviction as the volume was low. If our call is correct, the volume should pick up.

Indu      = the industrials fell on average volume. The next resistance point is 50,000.                                Spy       = the S&P 500 broke its first resistance point at 7473 on average volume. Next one up is 7200. Tran      = the transports fell the least on very low volume. The resistance point is 21 ,500.                      Nasdaq = It fell over 2% on average volume. Resistance is at 24,500.                                                        Russell = The small caps fell the most (almost 3%). However, the volume was low. Resistance at 280.

Note: The big bounce back rally last Tuesday was in our view, a short cover bounce. The proof came as the remaining week saw the indexes fall. This could repeat itself, but discovering the market trend is the real knowledge as to where price is going. One related aspect. A few weeks ago many chipmakers and new IPOs saw parabolic moves. We have learned that investors have used margin money to enter the market. Retail debt set a new, all-time level at $1.5 trillion. In the past when investors over use margin money, the market falls. This strengthens our belief in our call.

Tale of 3 Data Centers

The first in Texas was stopped by the owners call. Change of heart? Maybe or maybe something else? Please continue. Microsoft is halting its work. It leaves us the same question, why? Meta canceled its Michigan plant. However, this one has an answer and it is the same answer for the other two. These huge energy using locations cannot get its future need of...electricity. 

Related

We are not backers of the AI use to purchase carbon credits, but we see a lot of activity from a Singapore firm, Thryve.Earth. They are operating on the island of Sulawesi. Among their participating concerns are some big players like Tencent Holding, Google and the consulting firm, McKinsey & Co. The project increases forest cover, so we all can breathe better. Hope it works.

Closer Look

If you think that Space X fell hard (Half of opening high), there must be a reason. Yes, they scrubbed a launch, but not that. Apparently, the company is set to release a ton of shares into the market. This dilutes value. The shares can fall all the way back to earth.

AI Hack?

Can AI hack? Yes, it can and it can do so without human direction. Open AI hacked a firm last week on its own. This exposes another danger in the making of AI. Just like the early founders of the internet covered up the danger and problem of safety by hackers, the new developers of AI are not putting safeguards into their framework. This is greed. This is so wrong. They love the praise and riches, but they do not deserve either. Their work is corrupt and it endangers all of us. In addition, there are other problems like piggy-backing on someone's work. Case in point is Kimi K3. They used an AI model to track and train itself on American knowhow. Then, they claim a new advanced AI model. This is stealing! This is the root of almost every Chinese firm. Steal, cheat and lie!

By the way, the president and co-founder, Greg Brockman of Open AI says, "This is indicative of the time we live."  Sebastian say, "This is indicative of lying, greedy people."

Meanwhile...

Another month passes and along with it, the continuing retail and economic disasters in America. Patreon is cutting 20% of its labor force. Dairy Queen is closing 46 locations. Denny's is closing 150 plus restaurants. Papa Murphy's is cloing 50 locations and KFC is closing 207 locations. How can our unemployment figures remain so low in the face of all these failures? This is why we do not believe the BLS. If you leave out the "L" then you see the truth. Speaking of BS, the Fed reveals its latest today...Peace. 

Countdown 6...5...4

- It's not what you look at that matters, it is what you see.

- Henry David Thoreau

Market Call

We continue with our countdown call for a market correction after our Fourth of July holiday. The first week had little change. Last week, we saw the first real sign with the recent market leaders (chips) falling hard. Some high tech firms like IBM, Micron (MU) San Disk (SNDK) fell off a cliff.                                  

IBM = -74 points and in bear territory.                                                                                                    SNDK = -561 points and in bear territory.                                                                                                MU = -130 points and close to bear levels.

Not Everything

The banks like we called had banner profits. Apple (APPL) was up almost 6% on good volume. Brent oil closed up 15% for the week at its high of $88.05. This is very inflationary. The two big, recent IPOs fell hard on strong volume. SPCX is below its original, asking price. SKHY fell on double its initial offering and close to its original, asking price. Not good.

Unemployment

We never believe the BLS on employment. We look at the participation rate. It fell again. In fact, this is the lowest level (61.5%) in the last 50-years. Terrible!

Finally, the Scoreboard

Industrial (INDU)   = down on good volume.                                                                                                S&P 500 (SPX)      = down on strong volume. The lower resistance price is 7473.                                    Transports (TRAN)= up on lower volume and far from its high.                                                                  Nasdaq (COMPQ)  = down on average volume.                                                                                          Russell (IWM)        = down on rising volume.

Bottom line: If our call is correct, we should see another down week. However, we point out that the transports must be in harmony with the industrials. They are not. The ongoing saga of AI and data centers will continue to impact the market. We see the rising costs to high tech. This will lead to more borrowing and hurt the bottom line. We noticed a rumor. It says that the Fed will start some type of QE by the end of the year? The Fed's next meeting at the end of the month will answer a lot of questions, especially for those who took a "wait and see" attitude. Finally, in the mixing bowl of everything that is going on in the world, King $Dollar remains strong...Peace.