• 31 mins Meat And Dairy Account For 14.5% Of Global Greenhouse Gasses
  • 20 hours Social Media Influencers, Dream Job Or Billion-Dollar Fraud?
  • 22 hours Private Investors Turn Back On Mining
  • 1 day Four Big Pharma Companies Reach $250 Million Opioid Settlement
  • 2 days ‘Click To Pray’, The Vatican’s Latest Attempt To Draw In Millennials
  • 2 days 3 Oil Stocks Ready To Weather The Geopolitical Storm
  • 3 days Gold Miners Eye Big Third Quarter Profits
  • 3 days The U.S. Doubles Down On Domestic Lithium Production
  • 4 days Reddit Trader Scores 14,000% Returns On Rogue Trade
  • 5 days The Tangled Web Stretching From Turkey To DC
  • 5 days The U.S. Dollar Eyes Greater Upside
  • 5 days More And More Americans Believe A Recession Is Looming
  • 5 days Is The Pot Stock Boom Over Already?
  • 6 days How The California Utility Crisis Could Have Been Avoided
  • 6 days The Ugly Truth About Investing In Private Equity Deals
  • 7 days The World Is Facing A $1 Trillion Food Waste Crisis
  • 7 days Is It Time To Buy The Dip In Gold?
  • 7 days The History Of Oil Markets
  • 8 days Three Stocks To Watch Ahead Of Earnings Season
  • 8 days Markets Flat As Bulls And Bears Battle It Out
Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

  1. Home
  2. Markets
  3. Other

Using Energy As A Guide For Stocks

XLE


Key Levels For Energy Bulls And Bears

In a February 3 tweet (below), we noted market participants could gain some valuable insight into economic dynamics by keeping an eye on energy stocks (XLE).

XLE Chart

Thus far, energy stocks have been unable to break the 82.10 level noted two weeks ago.

XLE Energy Select Sector SPDR NYSE + BATS

If XLE can clear the 82.10 to 84.62 barrier, and hold above that range, the odds will improve relative to "scenario three" as described in detail on January 27.

Three Major Economic and Market Scenarios


Myth: Stocks Can't Do Well When Energy Is Weak

The point of the exercise is not to assess bullish and bearish odds for stocks, meaning stocks can go up within the context of a weak energy sector (see table below). The fate of energy stocks can assist us with the relative attractiveness of inflationary assets (e.g. energy) and deflationary assets (bonds).

Stocks and the Economy can do just fine when oil plummets

 

Back to homepage

Leave a comment

Leave a comment