Today's weakness in the Energy Select SPDR (XLE) coupled with the developing downtrend in my daily RSI pattern suggest strongly that last week's near-vertical advance indeed was a vicious counter-trend climb to a lower-high, rather than a new upleg. My work is warning me that the energy complex in general, and the XLE in particular, is in the early phase of a developing intermediate-term top formation that may take some additional time to mature, but which also will press the price structure towards a confrontation with its rising 200 DMA (now at 66.50) in the near future. Major components Schlumberger (SLB), Exxon ( XOM), ConocoPhillips (COP), and Chevron (CVX) all look like their individual chart structures are rolling over.



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.