XLE will correct quite sharply at some point: it is highly correlated with oil prices, is now three standard deviations above, and oil should return to $60-70 a barrel, cutting energy companies' income. Patient buyers will likely get a buying opportunity soon.

Do you think the price of XLE will drop? No, not at all. Yes, of course the price of XLE will fall, and it will fall quite sharply. Because that's what happens with oil prices.

Historically, there has been a very high correlation between the price of oil, which is the source of income for energy companies, and XLE.

And so, whenever there was a correction in oil prices , just like there was earlier this year , when oil prices fell, there was a reversal in oil prices and the XLE also corrected.

And since then there's been this sudden increase in oil prices and the price of the XLE has also increased, right?

And as you can see, it's now three standard deviations above. It will correct at some point, and when oil prices come down, it will be quite good.

So if oil prices fall back to $60-70 , which they probably will at some point, because that's the best time for the economy, when everything is going very well. I can extract oil at $ 60-70 per barrel , I can make a profit.

It's not that gasoline prices are having a serious impact on consumers, reducing demand for oil , etc. The price per barrel is $60-70, which is a pretty good level for this price.

So we will get back down to that level at some point and when that happens, that means the income of these energy companies will go down, because the price of oil is going down and the price of XLE will go down with it.

If you are looking for a good opportunity to buy energy sector stocks , be patient. You will probably get an opportunity very soon.