If the XOP/XLE ratio means anything…

The Oil & Gas Exploration ETF (XOP) is leading the Energy ETF (XLE) to the downside

Oil & Gas exploration is leading the broad Energy sector to the downside. While nominal XOP is still intact to its major daily chart trend, it has been hanging like a rotting fruit below its 200 day moving average for all of December in what looks like a bear flag with declining volume overall and down volume exceeding up volume.

If (and I am no authority) the Energy sector’s internals work roughly as other sectors do the implication is that the more speculative stuff, which led the upside, could lead the broad sector to the downside. XOP led XLE out of the Q1, 2020 disaster and the ratio is rolling over in a disgusting pattern now on this weekly chart.

xop/xle ratio of energy sector internals

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