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Energy Sector Exposure & S&P 500 Goldilocks Sentiment
Energy stocks via the XLE etf have shown an improvement of relative strength all year and are getting ever closer to a breakout move. From a positioning and sentiment perspective, few market participants are currently focusing on energy stocks as all eyes remain on momentum semiconductor names. Ultimately, if and when the XLE manages to hold above the mid $90s, it could go into a price discovery phase where upside is significant.
The XLE etf is not yet bullish trend on the Market Rover…but that can soon change.
Speaking of sentiment, our internal surveys show that over the past two months fewer and fewer market participants believe the S&P 500 can correct more than 5% this year. Our warning signals as a result have just gotten significantly louder.
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