There were, in fact, five stages of selling during the severe pullback in oil and energy-related stocks. Here's a timeline of how it happened.
1. The Facts Come to Light (2 Months Ago)
Signs emerge that energy prices are too high. There is oversupply, coupled with lower demand. None of the major producers (Saudi Arabia and other OPEC nations; plus Russia, Brazil, Nigeria and the U.S.) seem to consider cutting production. The U.S. dollar strengthens, putting downward pressure on prices.
The PowerShares DB US Dollar Index Bullish (UUP) , which reflects relative performance of the U.S. dollar vs. a basket of other major currencies (including the euro, yen and Swiss franc), responded strongly.