From the desk of Willie Delwiche.
A 14% rally in Energy last week (its 3rd best weekly gain in at least the past 30 years) was not enough to keep the long-term in the Energy sector from rolling over last week. This follows the down-turn in the long-term trend in commodities that we discussed last week.
The Details: The longest sustained up-trend in the Energy sector since prior to the Great Financial Crisis has ended. The trend for the Utilities sector also turned lower last week. For the first time since the COVID crisis none of the 11 sectors in the S&P 500 are currently in up-trends.
More Context: Energy has been an island of green surrounded by a sea of red this year and is still up nearly 50% YTD. But over the past 30 years, all of the net gains for the sector have come within an established up-trend. With the trend rolling over, investors looking for safe harbors have even fewer options.
Our Deeper Look examines sector positioning in light of Energy’s turn lower and where we are looking for evidence of strength and stress.
