Energy’s gone from forgotten to en fuego quicker than you can say “missiles over Damascus.”
Crude oil (@CL) hit $67.45 this morning, its highest level in 2-1/2 years. It’s up almost 8 percent on the week, its biggest three-session rally since December 2016.
There are two obvious catalysts. First, China’s decision to lower tariffs made the market sigh in relief. Fears of a trade war quickly morphed into greed for a commodity closely associated with global growth. Then early this morning, President Trump threatened to launch missiles at Syria.
For a sense of how dramatic the surge is, consider the fact that the SPDR Energy ETF (XLF) came into the session down about 3 percent on the year. It’s pretty much gone nowhere forever, even when the broader market was making new highs in January.
But this week, XLE’s 5 percent gain makes it the strongest major sector fund. Digging into the components on RadarScreen® we find that all the 31 member stocks are up since Friday’s close.
The price chart might also have something of interest for technicians because the rally places XLE firmly back above its 50-day moving average for the first time in over two months.