Trading Strategy – Energy Select Sector SPDR ETF

Energy is one of the worst laggards on Thursday as losses in WTI crude oil futures pressure the group. October Crude Oil futures fell 1.37 percent to 67.81/barrel after U.S. data showed gasoline inventories rose unexpectedly last week, overshadowing a bullish drawdown in crude.  The Energy Select Sector SPDR ETF (XLE) fell 1.85 percent to 72.81, bringing its YTD gains down to just 0.8 percent while the S&P gained more than 7 percent over the same period.  Now the question is whether recent selloff is a pause that refreshes or it’s a beginning of a deep correction?  Below is an update look at a trade in XLE.

The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges.  As shown, the underlying is in a short-term bullish trend when the price bars are painted in green.  The underlying is in a short-term bearish trend when the price bars are painted in red. 

Chart 1.1 – Energy Select Sector SPDR ETF (weekly)

Our “U.S. Market Trading Map” painted XLE bars in red (sell) – see area ‘A’ in the chart.  There is a distinct possibility that a massive triangle pattern is currently setting up in the daily chart of XLE.  Over the past few weeks, XLE has been trending lower after the late April rally found resistance just above 78.  That level was tested several times over the past years…Click here to read more.

You see, our trend-following system is very unique as it attempts to pick turns before others see them. Timing is everything and if you’ve applied our system correctly, you should have made a killing in any markets.


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