The energy space continues to put on a solid display of “leadership” in 2021. I put that in quotation marks since many would question that “dubious” command. Often investors like to see strength in technology or consumer discretionary. The overall energy space still has a single-digit representation in the S&P 500, which traditionally is in the mid-teens, so there is plenty of room for the space to move higher. The XLE on a YTD basis is still the best performing major S&P sector up 35%, maintaining a double-digit lead over the second-best actor in the financials. Like any other group, there will be some bifurcation within, and that is illustrated by the ratio chart below comparing the XOP to the OIH. Presently the OIH is 17% off its most recent 52 weeks highs, while the XOP is 10% off its own peak made back last month. The XOP is above its 50 day SMA, while the OIH is not, and on a YTD basis the XOP has advanced 41%, nearly double that of the OIH (OIH has a larger dividend yield of 4.1% compared to XOP at 2.1%). Many may be looking to play mean reversion, but let PRICES confirm that first. If anything one can own both as a “barbell” approach.