Slope of Hope Blog Posts
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Continuing on with our general market overview: if there’s one thing that has boosted the market more than anything else lately, it has been the recovery in the energy sector. As you’ll recall, 2015 was a disastrous year for energy, and the breakdown really accelerated in the first few weeks of 2016. It looked like countless energy firms were going to go bankrupt, the high yield bonds were falling apart, and oil itself was worth less than the barrels used to contain the stuff.
What’s crucial to remain mindful of is how all this time, the oil sector has been doing nothing but making a series of lower highs. Take a good look at the tinted prices below. There have been many “recoveries” along the way, the most recent of which has been the most violent. Until and unless it pushes past that green line at about 1270, however, the tremendous surge since January 20th is just that: another countertrend rally in the face of a long-term downturn.