Many traders know the old saw "overbought can become more
overbought." Strongly trending markets may look ready to crack on paper
but keep going longer than anyone expects. The other side of that coin
is that steep rallies can have equally steep corrections, and they, too,
can last longer than anyone expects.
Right now, the energy sector seems to be at a crossroads between these two possibilities. After a sharp run up this year, the
Energy Select Sector SPDR ETF (NYSE: XLE) became very extended to the upside by numerous metrics.
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