There's been discussion of the energy sector since Monday when Exxon announced buying XTO and XOM fell. So when I was reviewing some of Tony Caldaro's Objective Elliott Wave (OEW) public charts tonight (links at right - thanks again, Tony!), I took a look at XLE, the energy sector ETF. Tony's daily and weekly charts are below. The OEW markings imply that this sector, too, has the status of having topped a bear-market rally and now rolling over. So although broad indices like the Dow and Nasdaq are still relatively high and haven't confirmed a similar top yet. So if you're wondering which way to go with this - consider that in a downtrend, the idea is to sell rallies, not buy dips. True, XOM already made a handsome drop to its 200-day moving average, and might bounce temporarily (or not). Bit that drop was on real volume. Given the markings on the XLE chart, this sector still has a way to go before finishing its low.
The expectation is to re-test the previous low marked as "A" on Tony's weekly chart. That could mean landing about at that level; or could possibly mean carving a substantially lower low over the coming months. So dear readers, please be careful not to catch a falling knife. I did tweet recently about buying some DIG, my effort to go long on oil since I want to give crude oil - the commodity - the benefit of the doubt as having made its low and ready to move up to higher highs. But that's different from the company stocks (and maybe DIG wasn't the right choice, probably USO and maybe UGA (gasoline) would be right). Company stocks that travel with XLE should be treated as downtrending unless they prove otherwise.
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