About two months ago, we called for a bounce in oil once it dipped below $43 per barrel on an intraday basis.
When it reached the $46 mark, we said it could and should go further, with a $50 target, while the consensus view said just the opposite.
This call has gone quite well, as WTI crude was trading just below $48 per barrel on Monday and bumping up against the $50 mark last week.
However, I should note that the one reason we were so negative on oil for the first five to six months of this year is beginning to raise its head again: the underperformance of energy stocks.
Indeed, the energy-tracking XLE exchange-traded fund has begun underperforming once again.
Of course, this is due partially to the situation with North Korea, so perhaps the XLE can bounce nicely going forward.
If the XLE, which was trading on Monday just below $64 per share, breaks below the $63.90 to $64 range in a meaningful fashion, it's going to be negative for the group, and for crude, to which it's closely tied.