Here's How Our System Saw Energy's Breakout Coming

Once again, the calculus has changed in the Middle East conflict... Over the weekend, Iran directly attacked Israel. It launched more than 300 missiles and drones. [Chaikin PowerFeed]( Here's How Our System Saw Energy's Breakout Coming By Vic Lederman, editorial director, Chaikin Analytics Once again, the calculus has changed in the Middle East conflict... Over the weekend, Iran directly attacked Israel. It launched more than 300 missiles and drones. Israel and its partners claim to have shot most of them down. And now, all sides are considering their "next steps." It's a tense moment. And it's one that will eventually play out in the energy markets. After all, just about every mention of instability in the Middle East adjusts the price of oil... even if it's not directly related to the oil markets. But the energy sector has already been on the move this year. On Friday, the Energy Select Sector SPDR Fund (XLE) quietly touched a nine-year high during intraday trading. That's not all... XLE has been soaring in recent weeks. It's up 13.6% since the start of the year. That's more than double the S&P 500 Index's gain of 6.1% in 2024 so far. This performance is even more impressive when we consider the rough start for energy stocks this year... Now, let's take a look at how the Power Gauge saw this coming. We'll also discuss what it means for the energy sector going forward... Recommended Links: [100X Potential Recommendation Goes Live at 5 p.m. Eastern Time Today]( The man who has booked more 1,000% gains than anyone else at Stansberry Research just met with a former Nvidia engineer. He pointed him to a tiny investment that could make you 100 times your money if you get in now. "Like buying Nvidia for pennies," he says. [He's posting the ticker today at 5 p.m. Eastern time](. ["This Is How I'd Invest $1 Million Today"]( Legendary investor Whitney Tilson just posted a new portfolio of stock picks. He isn't buying the Magnificent 7... Or putting an equal amount of cash into each. Instead, he's using the Monte Carlo Method to see which of 4,817 stocks could double your money. [Click here for the full details](. XLE underperformed the market in January. It finished the month down 0.5%. That's an ugly result compared with the 1.6% gain for the S&P 500. And if we look at our Chaikin Money Flow indicator, we can see why XLE struggled... As regular readers know, Chaikin Analytics founder Marc Chaikin created this indicator to measure the accumulation (buying pressure) versus distribution (selling pressure) of a stock over time. Chaikin Money Flow can be a good way to identify the behavior of large institutional investors without directly tracking their order flow. This is because large institutions are disproportionately responsible for a "closing effect" on price. Put simply, the Chaikin Money Flow indicator helps us measure "smart money" trading. In the case of XLE, I've circled the most important spot to focus on for Chaikin Money Flow in the chart below... Notice the big red dip in the indicator in late January. That tells us that institutional investors were dumping energy stocks. We can also see that the selling ended in early February. The Chaikin Money Flow indicator flipped from red to green. And it stayed green for weeks – even as XLE traded sideways heading into March... [Chaikin PowerFeed] March turned out to be a huge month for XLE. The fund surged 9.6%. That was more than triple the S&P 500's 3.1% gain. There are two key takeaways here... First, it shows why the Power Gauge is such a valuable tool for spotting a trend change before it happens. In this case, energy stocks started 2024 in a downtrend. But our Chaikin Money Flow indicator started flashing green in February – before the big gains in March. In other words, the Power Gauge gave us an early signal that energy stocks were turning around. The second important takeaway is that XLE is in a confirmed uptrend. For the first time since late October, the Power Gauge gives the fund a "bullish" rating. As I mentioned earlier, the fund tripled the S&P 500's performance in March. And so far in April, it's up 0.9% while the S&P 500 is down 3.7%. So, if you're not paying attention to the energy sector now... I recommend you do so. Good investing, Vic Lederman Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 -0.66% 9 19 2 S&P 500 -1.24% 135 276 87 Nasdaq -1.65% 21 62 17 Small Caps -1.44% 324 1131 450 Bonds -1.55% — According to the Chaikin Power Bar, Small Cap stocks are somewhat more Bearish than Large Cap stocks. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Staples -1.54% Information Technology -2.26% Energy -2.29% Communication -2.65% Industrials -2.73% Health Care -2.89% Utilities -3.02% Discretionary -3.53% Materials -3.61% Financial -4.53% Real Estate -5.5% * * * * Industry Focus Pharmaceuticals Services 6 21 14 Over the past 6 months, the Pharmaceuticals subsector (XPH) has underperformed the S&P 500 by -12.28%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #16 of 21 subsectors and has moved down 1 slot over the past week. Indicative Stocks [rating] LQDA Liquidia Corporation [rating] AXSM Axsome Therapeutics, [rating] PLRX Pliant Therapeutics, * * * * Top Movers Gainers [rating] MTB +4.74% [rating] GS +2.92% [rating] VLTO +2.85% [rating] CNC +2.81% [rating] CAH +1.84% Losers [rating] CRM -7.28% [rating] TSLA -5.59% [rating] GL -5.55% [rating] ILMN -4.65% [rating] NOW -4.28% * * * * Earnings Report Reporting Today Rating Before Open After Close BK, NTRS, PNC, STT BAC, JNJ, MS, UNH JBHT, OMC, UAL No earnings reporting today. Earnings Surprises [rating] GS The Goldman Sachs Group, Inc. Q1 $11.58 Beat by $2.94 [rating] MTB M&T Bank Corporation Q1 $3.01 Missed by $-0.11 [rating] SCHW The Charles Schwab Corporation Q1 $0.74 Beat by $0.01 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. 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