No Energy on Thursday

Given how I walked the reader through a potential trade in XLE yesterday, it seems only appropriate to review what happened. In short, nothing worthy of buying.

You’ll recall, from yesterday, that the green dashed line is my first buy alert. That’s the first price where I would consider adding XLE to the portfolio. Since the price never got hit, no action was taken. But this is a great example of why we set specific entry points. That point is the first spot where I might believe that the bulls have defeated the bears and the strong trend will resume. At the moment, it appears that the battle is still raging. So, I’ll wait.

Sponsor Message From Author, C. Theodore Hicks II, CFP, CKA, CMT:

Europe

Due to publishing deadlines, when I write for the CMT Association, I do so shortly after the closing bell. Since I’m a Caroline Hurricane’s fan and Game 5 of the Stanley Cup Finals is tonight against the Vegas Golden Knights (VGK), I don’t know if I want to write this ...

But the other VGK - The Vanguard Europe ETF - had a strong day on Thursday.

Hockey humor aside, using the tools I discussed yesterday, I hope your eye automatically sees the positive trendline under the recent action. I hope you also automatically see the very limited overhead supply. Personally, I’d prefer to see VGK pause a bit before it breaks through that resistance. But overall, this looks attractive.

Advance-Decline is Suggestive

Our third chart for today is the Russell 2000 index in the top pane, with its Advance Decline line in the bottom pane. Note that the price action on Thursday did not move into new high ground. However, the Advance-Decline line did. That suggests the advance will continue – maybe not today, but whenever the AD line is advancing before the price, good things tend to happen.

S&P’s AD Line Also Suggestive

The last chart for today is the S&P 500 with its Advance Decline line.

While the S&P 500 AD line did not break out to new highs, it did break a down trendline. So, this is another way we can see that small-caps are relatively stronger than their large cap brothers.

I hope you enjoyed my writing this week. If so, feel free to connect with me on LinkedIn.

---

Shared content and posted charts are intended to be used for informational and educational purposes only. CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. CMT Association does not accept liability for any financial loss or damage our audience may incur.

---