4 Energetic Extremes


  • Jason Goepfert

    Jason Goepfert

    Published: 2019-05-06 at 11:29:57 CDT

Energy extremes

The selling pressure earlier this week in the energy sector triggered several shorter-term extremes in breadth. Most of those stocks fell to their lowest in a month, below their volatility bands. Few held above their short-term moving averages.

When the sector had rebounded more than 15% from its low, readings like this usually led to medium-term rebounds. These conditions led to major failures in 2002 and 2008, both right before the final meltdown at the ends of those bear markets. It would be a stretch to suggest that we’re in a similar market environment now.

Tech, small-caps lead

Two of the commonly-cited “risk-on” indexes enjoyed stellar gains on Friday. The Nasdaq Composite hit a multi-year high on its best gain in 7 weeks. The Russell 2000 broke out to its highest level since early October.

While both performances have led to above-average returns for those indexes, their influence on the S&P 500 was not strong.

The latest Commitments of Traders report was released, covering positions through Tuesday

The 3-Year Min/Max Screen shows that “smart money” hedgers moved to another record position in VIX futures, but that has not been a consistent negative for stocks. Hedgers also moved to multi-year long exposure in corn and soybeans, and they’re getting close in the contracts that make up the DBA fund.

Financial flow

XLF took in more than $700 million on Thursday.

This post was an abridged version of our previous day's Daily Report. For full access, sign up for a 30-day free trial now.

The post titled 4 Energetic Extremes was originally published as on SentimenTrader.com on 2019-05-06.

At SentimenTrader.com, our service is not focused on market timing per se, but rather risk management. That may be a distinction without a difference, but it's how we approach the markets. We study signs that suggest it is time to raise or lower market exposure as a function of risk relative to probable reward. It is all about risk-adjusted expectations given existing evidence. Learn more about our service , research, models and indicators.


Follow us on Twitter for up to the minute analysis of market action.


Not ready to signup up for a free trial yet?

Signup for our Daily Lite email to receive highlights of our daily report, research and studies.



RSS Feed

Subscribe to the Blog RSS feed

Recent Blog Posts


As mentioned in...

Brought to you by:

Sundial Capital Research Logo