Let's take a brief tour of the dramatic developments in the energy capital markets as of early November 2008. We'll just look at this one sector; for a broader perspective, see my Cause for Depression.
Energy and other resource stocks had been the leaders in the bull market since 2003, but suffered sharp losses in the third quarter of 2008 as part of the general cratering of the markets.
The XLE (in black) is the Energy Select Spider. The XLE:SPX line (in red) is a ratio comparing the energy index with the S&P500, a proxy for the overall stock market. These charts make it seem that energy's bull is bruised but not necessarily broken. It still shows impressive relative strength against the large cap index.