Mike's Mid Day Minute is available to members on Monday, Wednesday & Friday evenings, with one article per week available to non-members. Members please login and see "Mike's Mid Day Minute" in the navigation menu towards the top of the page.

Decline in Energy, XLE Beginning of Much Larger Correction?

Decline in Energy, XLE Beginning of Much Larger Correction?
By Mike Paulenoff, www.MPTrader.com

Time for a look at a comparison chart between the Energy Select SPDR ETF (AMEX: XLE) and the Proshares UltraShort Oil & Gas ETF (AMEX: DUG). The XLE (green in our chart) is in the grasp of a significant correction of its longer-term bull trend from the 19.38 low in July 2002 to the January 2008 high at 80.85. My next immediate target is in the 74.50-73.30 area, which amounts to about another 1%-3% from here. Meanwhile, the inverse ETF, the DUG projects next to 40.00-41.20 prior to hitting serious near-term resistance. Having said that, however, my longer-term technical work on the XLE is warning me that this decline is just the beginning of a much larger corrective move that projects to 68.00-66.00 area thereafter.

  • Action-Oriented Trade Set-Ups in Stocks & ETFs
  • Macro Analysis of the Broader Markets
  • Detailed Technical Guidance for each Trading Idea
  • Live Interaction w/ Mike & Our Member Community
  • And Much, Much More!
Join Now! - Special Offer!
Veteran Wall Street analyst and financial author, Mike provides detailed and timely analysis and trade set-ups on a range of markets. Read more...

Have Mike's “Out Front” morning analysis delivered FREE to your email inbox twice weekly!