The Market’s Battle: Energy or Utilities

Nearly every day, it seems, the best and/or worst performing sectors of the market are Energy (XLE) and Utilities (XLU).

This tells us something. From my world-famous “Elfenbein Theory,” the market is oscillating on an axis between Quadrants I and III. Here’s my chart again.

image1473

It’s like a boat where all the passengers go right from one side of the ship to the other. That’s what the daily action has been like. Here’s a look at how the XLE and XLU are behaving:

big08192015

They’re almost like two magnets. Recently, Utes have been winning. What’s happening is that the market is focused on interest rates. A rate increase shores up the dollar and will lower commodity prices. This summer has been a disaster for commodity prices.

Posted by on August 19th, 2015 at 12:24 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.