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Alfonso’s Daily Note

Energy Bulls Are Waiting

March 25, 2025

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The energy sector has been the top performer this year, but no one seems to care.

The setup has been building for some time now.

But what will be the catalyst for this trade?

For me, Commodity Trading Advisors (CTAs) might hold the key to answering this question.

Right now, CTAs are holding one of their largest short positions in Crude Oil in over a decade. 

 

That’s a historic bearish sentiment.

When positioning gets this extreme, the unwind can be just as aggressive. 

Any shift in sentiment or a supply shock could set off a fierce short-covering rally.

The Large-Cap Energy ETF $XLE is probably the...