DNR Also Stands for Do Not Resuscitate Energy Bears

As we discussed with Members in the full Weekend Video, some weakness early this week headed into the FOMC on Wednesday ought to be expected. And we are seeing just that morning, as the Dow leads lower but biotech and energy are exuding impressive relative strength. 

My inclination, however, is to sell some longs into strength, such as Denbury Resources (DNR), a natural gas exploration and production company based in Texas. DNR was hot out of the gate, and I elected to sell into strength as a means of lightening up my long exposure headed into the Fed. 

Nonetheless, the larger point is this: Energy is quietly outperforming and remains a viable rotation beneficiary going forward. Indeed, the bears' greatest flaw of late has been their inability to stem the rotation tide, enabling bulls to buy shallow dips with ease. 

Of course, there are some beatings out there, such as the NTNX offering this morning. And the SIRI for P deal was nice but nowhere close to the fat premium I expected Pandora to accept. 

But as far as equities as a whole go, the energy outperformance again this morning ought to command your attention for the next phase.