I'm no CMT, but this looks as good of place as any for Energy to reestablish itself. Back to pre-COVID levels and 1999/2000 lows relative to the S&P 500. pic.twitter.com/Ky6JHJLf74
— Rob Anderson (@_rob_anderson) July 25, 2023
Today’s Chart of the Day was shared by Rob Anderson (@_rob_anderson). The Energy Sector ($XLE) closed at three-month highs today and flipped into positive territory year-to-date. It’s been lagging all year, despite leading by a wide margin in 2022. Rob points out that we could see Energy outperform in the coming months as the sector tests a key level relative to the S&P 500. Energy outperformed for nearly a decade off of this level in 1999/2000. The ratio broke down during the pandemic when the global economy shut down and Crude Oil freakishly went negative. However, the pandemic period could end up being one giant failed breakdown for this ratio. You know what they say about failed breakdowns… “from failed moves come fast moves in the opposite direction!”