Priced for Perfection, Poised for Correction

Priced for Perfection, Poised for Correction September 14, 2026

TECHNICAL STRATEGY Refiners Offer Extreme Downside Asymetry After Record Run Jonathan Krinsky, CMT WHAT YOU SHOULD KNOW: ( The S&P 500 Oil & Gas Refining and Marketing Index (S5OILR) is up ~124% YTD. In its 30-year history, the prior best year was +80% (2012). The index is 122% above its 200- WEEK moving average, the second-widest spread in its history, and sports an 81 Weekly RSI. When you look historically at times when you had an 80+ weekly RSI, and the index was at least 50% above its 200wk M.A., the index was lower 7 of 8 times with a median 12-week return of -7.2%. To us, the refiners right now are very emblematic of the Semi/ AI trade in late June. Bulls are looking at the current fundamental environment, and extrapolating that out for the foreseeable future. What many forget about markets, however, is that they price in that good news 6-12 months in advance. So just like semis ultimately unwound their parabolic advance (and are still in the process of doing so), we suspect refining stocks will follow a similar path. ■ Weekly RSI Extreme. S5OILR has weekly RSI of 81. 4-week average and median returns have been -2.8% and -3%, respectively, and negative 75% of the time. ■ 200-Week Spread. S5OILR is 122% above its 200-WEEK moving average, the second- widest spread in history behind 2012. ■ Double Barrel Combo. When you look historically at times when you had an 80+ weekly RSI, and the index was at least 50% above its 200wk M.A., the index was lower 7 of 8 times with a median 12-week return of -7.2% ■ Oil Service Already Rolling Over. OIH was -1.6% last week, and breaking lower again today. We suspect this leads the broader energy group. ■ What's the Play? The three main refiners: Marathon Petroleum (MPC, not rated), Valero (VLO, not rated), Phillips 66 (PSX, not rated), along with PBF Energy (PBF, not rated), and Delek Holdings (DK, not rated) all look like an extremely poor risk/ reward right here looking out 4-8 weeks, and we suspect just like Semis, they will be met with an equal and opposite downside reaction.

Source for all charts and tables: Bloomberg and BTIG

PLEASE READ: IMPORTANT DISCLOSURES AND ANALYST’S CERTIFICATION APPEAR IN APPENDIX WWW.BTIG.COM

BTIG, LLC Jonathan Krinsky, CMT (