On Monday we discussed the fact that Energy has just broken out of a small downtrend relative to the S&P500. More importantly, this breakout came within the context of a much larger relative breakout that occurred this past Fall.
Yesterday, Arthur Hill over at Stockcharts.com posted this sector performance chart above. He went on to say that,
“…the Energy SPDR ($XLE) is the standout performer over the last 10 trading days with a 2.1% gain. In contrast, the S&P 500 is down around 1% during this timeframe. Industrials and finance have weighed on the S&P 500 the last two weeks, but technology is in the green”
This seems to be an ongoing theme here as energy outperforms the overall market. The US Dollar deteriorating everyday doesn’t hurt either. Take a look at this garbage Dollar Index:
It has been in a decline for as long as I can remember. Every consolidation has been just a breather before the next leg down. The most recent symmetrical Triangle seems to be another perfect example of this. Soon we will know for sure, but I think that we need to look at the Dollar as Guilty until proven innocent, as Brian Shannon @Alphatrends likes to say. I see no reason to think that we are at a major turning point for the Dollar here. I see a declining 200 day moving average and RSI continues to stay in bearish mode.
Show me US Dollar. Prove me wrong….