When you’ve got nothing to do…do this. At least it’s something. Check the holdings in $XLE (June 08, 2022)XLE SLB XOM HAL CVX HES PSX FANG EOG DVN APA BKR PXD MPC MRO WMB VLO CTRA DKE XMI DXY BKR
This is a really crappy market ( NYSEARCA: XLE ), a lot of stuff is just not really worth looking at, frankly, not much is worth looking at. So why am I doing this video instead of just going, no free stuff today? I will tell you why because I want to show you something that I do probably a little more often than you might think.
I am looking at all of the different industry groups, the sectors. They all really look like crap except energy is the one that seems to work for me. The whole shipping and ports thing, I go into that in a lot of detail in tonight’s Strategy Session. But I just want to look at energy now.
I see energy as working. And so if I am looking for new trades I will do this, I will pull up the energy ETF components, the holdings. And then I will sort according to gains or losses for this particular day. And then I will just start banging through them, and they will all look pretty good ( NYSE: SLB ), ( NYSE: XOM ), ( NYSE: HAL ), but I am looking for a particular look for entries. Chevron ( NYSE: CVX ) looks interesting, but no.
A lot of these are woulda, coulda, I wished I hada, ( NYSE: HES ), ( NYSE: PSX ), ( NASDAQ: FANG ), ( NYSE: EOG ). ( NYSE: DVN ), ( NASDAQ: APA ) kind of thing, ( NASDAQ: BKR ). I will just kind of go through these ( NYSE: PXD ), ( NYSE: MPC ), and look and see ( NYSE: MRO ), ( NYSE: WMB ), ( NYSE: VLO ), ( NYSE: CTRA ), ( NYSE: OKE ), ( NYSE: KMI ), ( NYSE: OXY ), ( TSE: XMI ), for what really seems to be working. It really is a great way to find stocks. It is also, by the way, a great way to get a kind of under the hood assessment of what is really going on.
And this is what I mean, if you are just looking at XLE ( NYSEARCA: XLE ) it looks a little kind of extended here. Now, don’t get too caught up in that because things that get extended tend to get more extended, that’s the way extensions work. But it does look like it is getting a little long in the tooth here and kind of begs for some type of either a sideways consolidation or maybe a little pull back. But is that really true?
This is when I would go in and look at the individual components. And what I am looking at is this ( NYSE: SLB ), am I seeing any good entries? And if I am not seeing any good entries, is it because the stock has already gone up too much and I would be chasing? Or is it because the stock just sucks and there is nothing for me? With those questions being asked I will get a real good sense of the underlying stocks in the sector.
Okay, too far ( NYSE: XOM ), too far ( NYSE: HAL ), we’re in that though. Too far ( NYSE: CVX ), too far ( NYSE: HES ), too far ( NYSE: PSX ). All of these ( NASDAQ: FANG ) are the same ( NYSE: EOG ), ( NYSE: DVN ). They are just like, yes, ( NASDAQ: APA ), most of these stocks have kind of gone too much. And so, so far what am I getting out of the sector? I am getting confirmation that the XLE ( NYSEARCA: XLE ), as it represents all these stocks, is where it is because a broad swath of those stocks has been doing the same thing, which is moving upward. It is not being driven by 1, 2, or 3 big stocks and the others are kind of sluggish ( NASDAQ: BKR ).
And so what this ( NYSE: PXD ) is telling me is ( NYSE: MPC ), there is some real institutional activity here because that’s the only way all the stocks ( NYSE: MRO ) would be going up. So there is some ( NYSE: WMB ) real institutional activity ( NYSE: VLO ), ( NYSE: CTRA ), ( NYSE: OKE ), it’s broad-based buying ( NYSE: KMI ). And by the way, if a stock like, well this is kind of a laggard ( NYSE: OKE ), I should buy that one. No, there is a reason why it is a laggard, I don’t know what it is, but there is a reason why you don’t want to be in this stock. Why you would have rather been in Chevron ( NYSE: CVX ) or Exxon ( NYSE: XOM ), something like that.
We go through all of these stocks and the sense that I get is, yes, this is a really strong sector. Yes, most of the stocks have gone up so much that I wouldn’t be comfortable buying them. That is way more information than the information that you will get if you just looked at the XLE ( NYSEARCA: XLE ). This is the kind of stuff that I do on days when there doesn’t really seem to be much to do. I will look at 500 charts within a certain framework so that I am just not banging through stocks.
You might want to use this in your own trading. Just remember, the buying and the selling are easy. A trained monkey, even an untrained monkey could do that, just click the mouse. But the real money is made in the searching, in the waiting in the patience. This to me is that time when you just really have got to be patient with what you are doing.