ENERGY ETFS NEAR UPSIDE BREAKOUTS -- OIH HAS ALREADY CLEARED ITS JUNE HIGH -- RISING ENERGY SHARES ARE PART OF THE REFLATION TRADE
ENERGY ETFS CONTINUE CLIMBING... Energy stocks continue to show new market leadership. That leadership is reflected in two energy ETFs that may be nearing some upside breakouts, and one having already achieved one. Chart 1 shows the Energy Sector SPDR (XLE) trading at the highest level in more than six months and nearing a test of its June intra-day high at 44.94. That will be an important test for the XLE.
XOP IS TESTING ITS JUNE HIGH...Chart 2 shows the S&P Oil & Gas Exploration & Production ETF (XOP) already testing its June high just above 70. An upside breakout there could be imminent.
OIH BREAKOUT... Chart 3 shows the VanEck Vectors Oil Services ETF (OIH) having already cleared its June high. Rising energy prices are the driving force pushing energy ETFs higher.
REFLATION TRADE IN PLAY... Rising energy prices are part of the general advance in commodity prices and the reflation trade which are being driven by expectations for higher inflation in the months ahead. Rising commodity prices are also one of the forces pushing bond yields to the highest level since March.
