Just An Interesting Chart

I've been sitting here trying to think of a catchy title for this note or connect today's chart to a much broader theme, but what I'm coming up with is anything but groundbreaking. So instead, I'm just gonna present what I think is an interesting chart.

The original mystery post was an inverted daily line chart of the MLPs/Energy (AMLP/XLE ) ratio, which was clearing resistance after a test of support and beginning to accelerate to the upside.

The real chart is the exact opposite, with prices falling at resistance and beginning to roll over. Everyone that wanted to be buying that was actually selling it, myself included.

Click on chart to enlarge view.

MLPs have been a great trade for a while in that they've gone down a lot less than many other Energy subsectors. In essence, they've been the "defensive" play in the sector and are now part of the mixed signals we're getting from our risk appetite measures.

For example, here are Consumer Staples failing at their late 2018 highs.

But then, on the other hand, we have the US Minimum Volatility Factor still making higher lows and higher highs.

So from a risk appetite perspective, I don't think we can draw any meaningful conclusions from MLPs rolling over here. What I think we can conclude is that we no longer want to be owning MLPs relative to the rest of the Energy sector.

The reward/risk is skewed in favor of the bears as long as prices are stuck below all that overhead supply.

Long story long, MLPs appear to be out of energy here, folks.

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Allstarcharts Team