XLE has been advancing since its late September daily cycle low, reaching a new high on day 23 last Friday.
That new high locked in a right-translated daily cycle formation, reflecting the strength of the advance. However, Monday’s price action suggests that the daily cycle may be turning lower. XLE has formed a swing high and closed below the 10 day MA to signal the daily cycle decline.
XLE remains in a daily uptrend. The distinction between a normal daily cycle decline and a more consequential change in character will depend on how price behaves from here – which will have implications on the weekly chart. I plan to break down what these developments could mean for XLE’s intermediate cycle in The Weekend Report.
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