Cut the Biggest Losers ... and Winners
The energy sector's been a tough place to make a living this year, that's for sure. Entering today's trading, less than 10% of the components of the Energy Sector Select SPDR ETF (XLE) are above their simple moving averages. Except for the refiners, who have taken advantage of a continuing Brent/West Texas Intermediate crude disconnect, most of the multinationals, oil services and certainly beta exploration-and-production players have been slumping with the quick 10% drop in oil prices over the last two weeks.
The first thing to wonder is whether oil's drop is a canary in the coalmine for the market in general. Historically, this has not been the case and oil has been a poor indicator of general market momentum. Even in the crash of 2008, the stock market was well off its highs when oil began its death dive in July. Despite deep periods of near 90% correlation, you can't rely on oil to tell you much about the stock market....351 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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