August 31, 2016 / 9:02 PM / 2 years ago

BUZZ- Energy ETF: Momentum being depleted

** Developing upside breakout in the Energy Select Sector SPDR fund has quickly stalled; momentum now waning, and pressure flipping back to downside

** XLE mid-Aug thrust above neckline of inverse head & shoulders pattern failed to carry higher

** Inability for NYMEX Crude futures to confirm with a similar breakout above its trigger line an intermarket bearish divergence; XLE 10-week log correlation with CLc1 running close to 0.9

** Crude now down 8 pct in just 8 trading days, and XLE off 3.4 pct from its Aug 18 high; ETF still up 13.2 pct YTD

** XLE strength faded shy of $71.70/$71.93 chart congestion, and ETF has quickly reversed back under neckline. Chart:

** Weekly MACD, which has been positive since early Mar, on verge of negative cross; flips ETF’s trend bias to downside

** XLE has returned to its recent range, but action puts early Aug low at $64.57, and 40-WMA (now $63.56), under threat

** Weekly closes over $69.60 will be constructive again, but $71.70/$71.93 now stiff barrier without crude confirming the move

** Top XLE holdings by pct TNA end-Jun include Exxon Mobil , Chevron, and Schlumberger

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