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Strategies & Market Trends : Technical analysis for shorts & longs
SPY 670.21-1.1%4:00 PM EST
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To: Johnny Canuck who wrote (49135)1/31/2013 12:02:06 AM
From: E_K_S  Read Replies (1) of 67706
 
Hi Johnny -

I expect energy to re-test the break out above the old high.


Heard a technician today stating that XLE will fail the new high and is ready for a correction lower, perhaps testing the June low. His opinion was based on the relative low weekly volume coming up to the new high. What are you looking at that would confirm a failed attempt of the high and a retest of that June low?

One telling sign that this technician noted was that many of the refiners were reporting record profits suggesting that their margin spreads are/were large for the crude they bought compared to the price they sold their refined gasoline at. It appears that the refiners were able to hold their prices high but obtain cheap crude. Could XLE be priced artificially high when the actual price of crude could be falling and/or is lower?

I am not exactly sure how that works with crude futures and contango pricing but as those crude oil contracts roll over could that influence the price of XLE (ie accelerate it lower?). I wonder if the speculators are influencing the crude oil markets again?

Or do you we just have to wait and see if that "re-test" fails?

EKS
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