The technical moves in energy today can make an additional case that energy is in a bearish state.
First. let’s look at the energy ETF, XLE. This past Friday, it broke through a support level, and broke a trendline. Due to the late day rally in the equity markets, it closed positive, thus forming a whipsaw. Today, it closed below the support level & the trendline.
To top that off, spot crude oil also broke through a technical level, a trendline. Pending confirmation tomorrow, the next area where it will meet some sort of support is at $67.
We have to wait till tomorrow to get confirmation for both of this move & verify it is not an other whipsaw. As of now, I am bearish. For those of us who cannot short either, you can play this move with the short crude ETF, DUG.