Holding ERX (Energy Bull 3x)

This position has been in place and it's moving toward working well for me. As you know last week I closed the UCO (USO leveraged long) and I'm glad I did, I expected a pullback, even though I think it does have more upside. I'll cover oil in a different post, but Energy is similar to oil, except oil seemed to be rotating a bit harder than energy short term (week) which shouldn't be too surprising as they are different, Energy includes a lot of different components including services whereas oil is 1 thing, oil.

I think ERX is in a position here in which it is still a viable position, any pullback would make it more attractive and I may even add a bit to the position if given the right opportunity which of course I will post here first.

So lets take a look at Energy via XLE and then ERY and ERX.

XLE-Energy

 The 15 min chart is positive for Energy so that should be at least a decent swing long.

 The 10 min chart has pulled together well.

 The 5 min chart is showing some closer tactical signals with a leading positive on this morning's dip.

 The even faster 3 min chart also leading positive on the dip of the last 2 days, it looks like each dip is seeing short term accumulation.

 And finally the fastest 1 min chart also leading positive, with the 15 min in place already positive, this looks like Energy is ready to go and make a leg higher.

 Longer term, Just as Energy went negative (we played the core shorts with some energy stocks) in early 2012 or toward the end of Q1 2012, it also saw the same positive divergence the rest of the market did in late May/early June. Since, the divergence has grown to the strongest on the chart, leading negative as it looks like the June accumulated shares were sold in to strength and then some, longer term I'd expect we see a move much more significant than the Q1 2012 to June lows.

ERY, Energy Bear 3x

 Very short term intraday, the 3 min isn't looking good on any attempts at strength, they looks to be under distribution.

 The 5 min is more important and it shows the situation deteriorating at 3 areas of similar price with the last moving the highest, but 3C showing the worst reading there.

 This now has the 10-15 min charts both above and below in leading negative position, which confirms the strength on the XLE 15 min chart as ERY is the opposite of XLE.

 ERY 15 min leading negative

 However longer term on the 4 hour, ERY agrees with XLE as it is leading positive where XLE (the opposite) is leading negative. So I'd expect the same as we expect for the general market, near term strength in Energy and that setting up longer term weakness.

ERX Energy Bull 3X- This should give the opposite signals of ERY and the same signals as XLE for confirmation.

 Long term, a leading negative divergence so it confirms both XLE and ERY.

 Shorter term the 15 min (a swing timeframe at least) is leading positive so I'll hold ERX long for this move higher.

Near term it is positive as well. Every chart in 3 different ETFs that are seeing different volume and trading action are all saying the same thing on every timeframe, near term strength in Energy, but bigger picture is setting up for weakness and that's why I want ERX long right now until we are in an area that I feel I should close the position at a profit and look to short Energy.