A Lot of Energy in These Markets

The tout is that we NFTRH+‘d the energy sector months in advance of the bottom as a ‘look-ahead’ to a big buying opportunity.  Here is the updated chart from that original update.  The bottom projection was at 55 to 60 (secular bull channel bottom) with possibility to 50 (long-term lateral support in the event of a quick down spike and reversal) added shortly after.  The sell target was 75 at notable resistance for traders or a ‘hold’ for investors.

xle.mo

I got the idea for this post after reading the Fly, who I like, have linked and really enjoy reading.  But he has been wrong on energy and is pissed about it.  Here is a post on the subject bringing up many fine fundamental points.

The problem is that in a market driven by inflation, you never know where the capital is going to mis-allocate next.  During the Goldilocks phase, it was the US stock market that got the inflation although Wall Street will not advertise it that way.  Now the mask is falling off and more traditional barometers like gold, silver and the energies are getting pumped.  To every thing, turn turn turn… there is a season turn turn turn…

Here’s the daily view (I am enjoying the stark ‘portrait’ chart views I am using to make my points today).  I may end up selling XLE (again), as I have been able to trade it all the way up.  It depends on how hard my hype meter is pinging heading into FOMC.

But I am holding it in the kids’ accounts, which are more for long-term investment.  Those accounts also hold GDX at 16.53 & 16.59 a share.  There’s something to be said for holding during Fed sponsored inflationary regimes.  It’s a tricky situation for sure.

xle

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