The trouble with the energy stocks:

The trouble with the energy stocks is minor if you’re a well financed energy giant such as the companies in the US listed SPDR Energy ETF (XLE)  where Exxon Mobil Corp (XOM), Chevron Corp (CVX) and Schlumberger Ltd (SLB) represent about one third of the sector by market weight. Just to stress the depth of the (XLE) the number ten by weight is ConocoPhillips (COP)

In contrast the fly weight Canadian energy space – as replicated by the iShares S&P/TSX Capped Energy Index ETF (XEG) where the relatively small and troubled Encana Corporation (TSE:ECA) and Crescent Point Energy Corp (TSE:CPG) rank high in a long list of small to micro cap issuers fighting for survival.

Our chart is the monthly XLE above the XEG where you can see troubles with the Canadian energy space (XEG) beginning from the October 2011 lows when the sector failed to run to a new 2014 high as did the SPDR XLE. Note also the long 10+years bullish series of higher lows on the SPDR XLE. The long series of lower highs on the Canadian sector XEG is likely due to the flawed belief that many components can return cash to shareholders and still grow their business. Clearly the Canadian energy complex is a train wreck.