1 min read
This chart shows why investors got excited about energy even before the Iran war flared up and sent crude oil to triple digits.
The S&P 500 (^GSPC) fell into a bear market in 2022, then finally forged a bottom late that year before beginning its long climb back. Meanwhile, the Energy Select Sector SPDR Fund (XLE) surged into mid-2022, then spent the next few years going mostly sideways.
That long stretch matters. XLE was not breaking down. It was coiling. And in January, XLE finally broke free of that coil with force and began to separate itself from the broader market again.
That’s why this still looks bigger than a short-term oil spike or a war headline trade. On the longer-term chart, XLE is finally pushing above a $50 ceiling that capped it for more than two decades.
As the godfather of technical analysis, Ralph Acampora, likes to say, “The bigger the base, the higher in space.” Energy may be only beginning to fulfill that maxim.
Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared or email him at jaredblikre@yahooinc.com.
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