For Those Who Do Not Believe:

I have posted this chart several times from Novel Investor when writing up on energy. Notice that 5 of the last 7 years energy was the WORST performing major S&P sector, and in 2017 it was the second weakest actor among the 11 groups. But in 2016 the space was the best behaved up by more than 27%. This year almost through one quarter, the XLE is by far the strongest up by more than 40%. This is one of the reasons why I still believe this group has legs, of course the technicals are backing it up. Now am I saying energy will lead for years to come, absolutely not, but it can certainly be the best when all is said and done in 2021. The XLE has advanced 13 of the last 18 weeks, and is just 1% off most recent 52 week highs. Last week rose 10%, in the second largest WEEKLY volume in 10 months, and this week is higher once again, albeit fractionally. Remember as Walter Deemer said once the train leaves the station, if it comes back there is something wrong with the train. Look for shallow pullbacks to get onboard. Larger drawdowns are unlikely.

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