Energy Update

Here's yesterday's update on Energy 


I want to specifically mention a couple of lines from yesterday's update


When looking at ERY (Energy Bear) there was a slight 1 min positive divergence, I had this to say about it,


"Here's 1 min chart confirmation  and a slight bump up in 3C, maybe we get a gap down in energy tomorrow"


When looking at ERX (Energy Bull) there was a slight negative divergence and I had this to say about it,


"And the 1 min chart, showing a little brief weakness going into the close, again hinting at a possible gap down in the sector tomorrow a.m. or some early weakness."


As we know, we are seeing the underlying action n price, or seeing a lot of what smart money is doing, but we don't always know why. We do know they are way ahead of us on the information curve as I have shown you many times. I believe Energy is partly under pressure because of the rising dollar today after the BOJ intervened in the currency markets last night again-an act that has almost no lasting meaning. In any case, the dollar is stronger against several currencies and this is what UUP looks like this morning vs XLE.

UUP (proxy for the Dollar Index) in green and XLE (Energy) in red. You can see XLE held up pretty well against the parabolic rise in UUP, as you know there's an inverse correlation between energy or oil more specifically and the dollar.


As for some Energy ETFs...

 XLE 15 min Leading positive divergence

 XLE 10 min leading positive divergence

 XLE 5 min leading positive divergence

 XLE 1 min, slight negative divergence

 USO 60 min leading positive divergence

 USO 30 min leading positive divergence

 USO 5 min trading in line with price

In the red square is the divergence I mentioned last night that would lead to early weakness today. There's also a slight positive 1 min divergence. For now I would consider this a consolidation pattern, I'm going to look at the Euro and the USD and see if anything looks like it's going to break one way or the other.