Almost exactly one month after the XLF exploded off of its July 15th low, the XLE has exploded off of its August low. The chart patterns are almost identical so far.
The XLF’s move peaked only five trading days after it began.
The XLE has blasted straight up three days in a row now.
Both moves off of the lows are pretty blatant short-squeeze action.
Of course, the energy companies routinely make billions in profits while the financials routinely destroy billions, but that should be priced in. The XLE should be able to run higher, but I am skeptical that this move will have any more staying power than the XLF’s.
It’s the sector-rotation, short-squeeze-rally market, right?