Energy

There is something definitely going on in the energy complex. Lets look at some of the names COP, CVX, XLE. CVX counts nicely with the EW labelling shown or as a a-b-c-a-b-A upmove followed by a long, slow b wave down. The picture is similar in cop. Even better the weekly chart of XLE looks like a flag/pennant in the uptrend. The daily stochs are just turning up now. Could this mean off to the races for the energy names? Could this be the leader for the SPX to go up negating the bullish wedge? Well the energy sector looks willing technically. Lets see what happens. If the pennant  is broken on the upside in CVX, we may go long with a stop underneath the lower edge of the pennant. 

 

Lets look at timing . Our next cycle date is a low in the week of May 11th. 

Sentiment:-

Ofcourse playing contrarian without proper sentiment indicators is risky, but doing so anyways... Literally every blog, every news channel is calling for a pullback. Lots of technical traders recognize the bearish wedge. Everyone is skeptical of the stress test results (maybe rightly so).  Almost no one believes the bank earnings (maybe rightly so). What is a bear market rally if it doesn't make sentiment bullish. If the SPY goes up above 861 instead of breaking 840, the thrust upwards can easily make the 940s. Our strategy is to remain nimble and watch for the triangle on the hourly to break one way or another, for the move could be explosive.