Energy and Tech

The ratio of XLE $83 to XLK $138 is 0.60 currently. I predict it will get to at least the 1.5 area by the time this bear market completes (or this phase of it if it lasts for many years).

The ratio has almost doubled this year with XLE rising over 50 percent and XLK down about 20 percent.

Below is a chart with a blue line at the 1.50 ratio along with a table showing various XLK prices for given XLE prices. As a rule of thumb, there is still around 40-percent of the S&P 500 Index in tech and companies that trade like tech stocks despite being in other sectors. XLK has a flat return if XLE gets to around $200 and that ratio, a doubling of XLK requires XLE at $400 or better than a quadruple. 

If one expects structurally higher energy costs moving forward, the outlook for tech is grim and/or the outlook for energy is very bullish. There is no reason to be investing in tech or in the major indexes with their massive tech exposure, unless one doesn't expect inflation/higher energy. A return to the 2009-2020 economy.