The Power Gauge Says Energy Stocks Are a Disaster

Here at the Chaikin PowerFeed, we've written a lot about the energy sector over the past few months... And there's a good reason for that. Energy stocks, specifically oil and gas, are a huge part of the economy. [Chaikin PowerFeed]( The Power Gauge Says Energy Stocks Are a Disaster By Vic Lederman, editorial director, Chaikin Analytics Here at the Chaikin PowerFeed, we've written a lot about the energy sector over the past few months... And there's a good reason for that. Energy stocks, specifically oil and gas, are a huge part of the economy. In 2023, U.S. energy sector employment grew by 3%. That translates to an increase of roughly 250,000 jobs. Sure, 3% not might sound like a huge number. But that means energy sector employment growth outpaced the overall employment growth in the U.S. by about 50% last year. Today, nearly 8.4 million Americans work in energy sector jobs. In other words, nearly 5% of Americans work in the sector. So the space deserves a lot of attention. And we've given it that. For example, [in late September]( my colleague Joe Austin explained what we need to see for a recovery to take place in the energy sector. We also shared a guest essay from our friend Brett Eversole at our corporate affiliate Stansberry Research at [the beginning of this month](. In it, Brett discussed a contrarian perspective on a potential oil boom. And then [a few weeks ago]( I explained why I was still keeping a close eye on oil and energy amid economic stimulus measures in China and the conflict in the Middle East. But folks, we can't avoid the reality of the situation... Recommended Links: [Here's the Unveiling You Missed on Tuesday]( Wall Street legend Marc Chaikin explained how November 8 will open the biggest "rapid fire" moneymaking opportunity of his 50-year career. This is a new way to spot potential buying sprees on 5,000 stocks – before they occur – for the chance to double your portfolio over the next year. [Click here to learn more, including his four free recommendations](. [Six Cryptos to Buy BEFORE the Bitcoin Supercycle]( Bitcoin is screaming toward a new all-time high. And according to crypto expert Eric Wade, it's just getting started. A proposed federal program backed by both Republicans and Democrats is set to ignite a new crypto bull market. To help you prepare, Eric just released an emergency briefing detailing six cryptos with 1,000% potential to act on immediately. [Click here for this brand-new crypto update](. Now, I pointed this problem out [at the end of August](. At the time, I told readers that the SPDR S&P Oil & Gas Equipment & Services Fund (XES) was the lowest-ranked subsector in the Power Gauge. And that's still true today. But the overall situation has gotten worse... Right now, the SPDR S&P Oil & Gas Exploration & Production Fund (XOP) is the second-worst subsector in the Power Gauge. And neither of these funds hold ANY "bullish" or "very bullish" stocks. That should get your attention... You see, it's one thing to see a contrarian opportunity forming. But that doesn't mean you want to catch the proverbial "falling knife." That's exactly what the Power Gauge is telling us today. And we can see that the problems have made it all the way up to the top-level sector itself... In the Power Gauge, we use the Energy Select Sector SPDR Fund (XLE) to track the overall energy sector. The fund holds household energy names like ExxonMobil (XOM), Chevron (CVX), and ConocoPhillips (COP). Today, XLE earns a "very bearish" rating in the Power Gauge. And it's easy to see why when we look at its performance this year... The broad market is soaring. But energy stocks have taken a terrible tumble since early April. Over the course of the year, that has translated to serious underperformance. As you can see in the chart, the broad market S&P 500 Index is up 22% in 2024. Yet XLE has barely gained 5% over the same time frame. Investors who overallocated to energy this year made a huge mistake. But the Power Gauge made it clear that this was avoidable... XLE has been in "neutral" or "bearish" territory in our system for most of the year. The same has been true for XOP and XES. And now, all three funds are at the bottom of the barrel in their sector and subsector rankings. So, it's OK to look at energy stocks and see that a contrarian opportunity might be forming. But the Power Gauge is clear... this corner of the market still looks dangerous today. Good investing, Vic Lederman Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 -0.18% 9 17 4 S&P 500 -0.31% 134 282 77 Nasdaq -0.76% 27 63 10 Small Caps -0.13% 511 1042 366 Bonds +0.32% — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain somewhat Bullish. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Discretionary +3.04% Communication +2.81% Information Technology +0.52% Financial +0.04% Real Estate -0.79% Industrials -0.96% Materials -1.14% Health Care -1.52% Staples -1.92% Energy -1.97% Utilities -3.69% * * * * Industry Focus Bank Services 48 44 0 Over the past 6 months, the Bank subsector (KBE) has outperformed the S&P 500 by +7.91%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #2 of 21 subsectors and has moved up 1 slot over the past week. Top Stocks [rating] NTRS Northern Trust Corpo [rating] BK The Bank of New York [rating] FHN First Horizon Corpor * * * * Top Movers Gainers [rating] GRMN +23.25% [rating] SW +11.99% [rating] FMC +10.7% [rating] TECH +7.46% [rating] DAY +7.29% Losers [rating] SMCI -32.68% [rating] QRVO -27.31% [rating] CDW -11.3% [rating] DVA -10.8% [rating] AMD -10.58% * * * * Earnings Report Reporting Today Rating Before Open After Close XEL, TMUS, CMCSA, SO, PWR, PH, ETR, GNRC, NCLH, MO, KKR, ICE VICI, AMZN, DLR, AAPL NEM, AME, BMY, WTW, WEC, CI, TFX, COP, REGN, ETN, GWW, MRK, HII, MA, LIN, HON, KIM, K, IQV, IP BWA, CMS, CPT, BA, APTV, EMN, ERIE, INTC, AMCR, JNPR, LNT, UBER BALL, XYL, EL, IDXX CTRA, IR, AJG No earnings reporting today. Earnings Surprises No significant Earnings Surprises in the Russell 3000. * * * * 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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