Energy Above Water, Energy Below

Bulls seized the moment today for a snapback rally. However, looking through the major index charts it is perhaps a tad early to declare the recent selling to be fully in the rear-view mirror. Home Depot earnings (and plenty of other retailers) tomorrow morning before the bell may very well set the tone for the open tomorrow.

But what has my eye this afternoon is the solar sector completely ignoring, once again, the redundant weakness in the energy sector stocks (XLE OIH XOP ETFs, e.g.).

Typically, solar flourishes as a sensible alternative fuel source when crude oil surges alongside energy stocks.

Thus, what makes this solar rally all the more bullish is to see them continue to improve technically without crude spiking, or anything close to it. 

The reason why we continue to revisit this notion is that when a given asset class, market, or sector rallies when there is apparently not much reason to (i.e. no real news), it can be all the more bullish going forward, because the good news will eventually come out and then become well-known, which in turn brings in even more buyers for a less-obvious rally.

One step at a time, though, as solars have been, easily, one of the most impressive sectors since May.