The weakness in the Energy Select SPDR (AMEX: XLE) today has inflicted some technical damage to the near-term chart structure. Let's notice that the plunge beneath 77.10/00 has violated the up-trendline off of the August low, which has triggered downside follow-through to initial support at 76.00-75.80. Judging from the very negative juxtaposition of the price action and sharply declining RSI momentum gauge, I expect additional weakness to press the XLE towards 74.00 prior to any meaningful recovery rally period.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.