Energy Sprint:
As we approach the second half of 2021 in a couple of weeks, the clear standout thus far is energy. The XLE has gained almost 50%, 20 percentage points more than the second-closest major S&P sector competitor in the financials. There is still a long way to go this year but my prediction would be energy finishes as the best group, and that is not really going out on a limb. The only question is whether the bulk of the returns have been achieved already. Look for individual opportunities within buying leaders, as the creme always rises to the top. The XOP is where to search, and it may offer some good entries as the ETF was stopped cold precisely at the round 100 number this past Wednesday (a gift would be a move back to retest the double bottom with handle breakout above a 90.30 pivot taken out on 6/1 powering higher by 6.5%). Below we can see just how quickly things changed for the XLE, which was a clear underperformer as recently as last October, and by early February, circled the field to go in front like a well-trained closing thoroughbred. The markets seem to be bifurcated in 3 ways with energy and financials leading, followed by materials and industrials, and then the rest over the last 200 days.