Updating the “last inflated man standing”

The Energy sector ETF (XLE) continues a would-be topping situation

Why yes, I got clowned a little last week as I was compelled by my personal psych profile and risk management to take a much smaller profit on Energy short ERY than had I done it a day earlier when I made this post.

But on Friday per the trade log…

Well, I shorted the last inflated man standing again, adding ERY in a position that is not as large as the previous one. Thinking maybe it’s a Diamond consolidation and I’d drop the position if it takes out the upper line. Otherwise, I’d like to see it (XLE) go the way implied by RSI and MACD, which is south.

RSI is ticking into the red this morning as MACD continues to roll over. The last position was too large because my conviction about a short-term (not terminal) top in Energy is large. This position is fine, especially since ERY has ‘2x’ leverage.

Even the staunchest Energy bull might admit that XLE can probably at least use a tap of the SMA 50 and the 38% Fib retrace level, if not support and the 50% Fib at 81-82. If things get off the hook, there’s a gap down there at 72. We shall see.

Energy sector ETF (XLE)

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