The Energy Select Sector SPDR (XLE) had a high volume down day to the 50 day moving average yesterday. One high volume drop can mean nothing. But note the number of high volume bars in the past two weeks. There is definitely distribution going on in this ETF.
The price of West Texas Intermediate Crude (WTIC) has bounced in the past week. But price is below the 3/4 line of the 2007-2008 range which has provided resistance since August. Until price takes out the recent high at 75.09 I do not believe it is safe to consider a long position in oil.
Natural gas has bounced since I suggested a short term low could have been made a few weeks ago. I doubt this current move is anything more than a dead cat bounce. The 1×4 price level or the 1×8 angle from the 2002 low should stop price – unless there is a true change in trend occurring.
Charts courtesy of Stockcharts.com
http://www.youtube.com/watch?v=g1DtQldf66E
I hope that most of you enjoyed that song, I thought it was the only way to describe the market this morning. Up and down, rich man, poor man. Of course the song was a one hit wonder in the 80′s, and that is sort of what we had today, a moment of bear bliss, and duuuud….LOL! I think we still head a little further south but the channel held for now…Have a good wkend everyone…
Libby – seems like I remember that song from back in the day… not really my cup of tea… interesting song though