Cycle Trading

PRE-SUMMARY

XLE signaled a daily cycle decline after breaking below the 10 day MA. 

XLE formed a bearish reversal last week on Wednesday, day 23. XLE then formed a swing high on Thursday and delivered bearish follow through on Tuesday. Tuesday’s decline pushed XLE below the 10 day moving average, signaling the daily cycle decline. From a cycle perspective, XLE should now go on to turn the 10 day moving average lower as it continues seeking out its DCL.

Short-term momentum has weakened following the rejection from recent highs. However, XLE remains in a daily uptrend despite the current cycle decline. A close below the lower daily cycle band would be needed to end the daily uptrend and begin a daily downtrend. 

Cycle Alignment:

• Mixed