In each instance, the following months saw a correction of the XLE in varying amounts. It makes you wonder if the buyers of energy stocks are blindly ignoring this at the moment.
Interestingly enough, I had argued that the fundamentals support a bounce in crude when in fact the bounce occurred in the energy stocks. Go figure. Anyhow, I believe the energy stocks have become too stretched here and should migrate back towards the crude barrel.
And a quick note on natural gas prices. Thursday's report was bullish in my opinion but perhaps the cold weather trade, combined with the fact that we are stalled at the $8 resistance, has traders taking profits. I avoided the complex last week after getting buried on a short but look to re-enter sometime soon.
XLE vs. WTIC 7-yr chart: