ENERGY SHARES START TO SHOW RELATIVE STRENGTH

Energy shares were this week's strongest market sector. That's the first time we've seen relative strength by the energy sector in three months. Chart 1 shows the Energy Sector SPDR (XLE) trading at the highest level in seven months. [A "golden cross" has also been formed by the 50-day average rising above the 200-day (gold circle)]. The line along the bottom is the XLE/SPX ratio, and shows it breaking a three-month down trendline. That's a sign that money is starting to move into this sector more aggressively. Chart 2 shows the Market Vectors Oil Services ETF (OIH) very close to breaking through its 200-day average (red circle). Its relative strength ratio (below chart) is also starting to rise.