Today's market highlights the importance of following multiple indicators. At 10:30 the DOE's oil inventory numbers were released and crude prices reversed what had been a decline. As shown below, the energy sector turned at the exact same time and has followed crude prices higher.
On a year-to-date chart we see that gains in oil preceded gains in the energy sector and any divergence of the two should be taken as a leading indicator.
Also as a corollary to our previous post
, crude held the 50-day moving average and continues to trade higher. Based on forward contracts a fair price for the commodity over the next 6 months is a range of $50 - $60.