Divergent Energy

000

Oil printed its lowest point on day 48, following the day 27 peak, placing oil in the later stage of its daily cycle timing band.

1 oil

Oil closed above the 10 day MA on Wednesday and delivered bullish follow through on Thursday to signal that oil has begun a new daily cycle.

2 oil weekly

Oil has formed a weekly swing low off of support at the 50 week MA. Since oil has formed 2 ICL’s at the support from the 50 week MA it is possible that week 18 hosted an early ICL. But the divergence in the Energy Sector ETF XLE suggests that oil could still print one more failed daily cycle.

3 xle

Oil railed for a 1.7% gain on Thursday while XLE close lower. That bearish divergence is a warning signal. So we need to be alert to the possibility that oil will print one more failed daily cycle to complete its intermediate cycle decline. A close below the lower daily cycle band would signal that oil is continuing its intermediate cycle decline.

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