XLE: Looking for some Pullback

2022年11月23日

XLE is in pullback territory.

EDIT! I say for TUESDAY but I mean for WEDNESDAY!!

Not sure I would be super bearish on this at this point. I know a lot of people are advancing very bearish ideas for XLE, but if we look at the buyers to seller ratios on XLE and XOM, they are huge. Far higher than on SPY on both the weekly and daily time frames.
As of the beginning of this week the buyer to seller ration on XLE was 1.30, whereas SPY's was below 1.01.
On the daily, after today, the buy to sell ratio was 3.34. This was a first time I have ever seen a buy:sell ratio that high outside of TSLA. Nuts!

So buyers are still present and until they back off a bit, I don't want to advance an overly bearish thesis on this. But that said, we are approaching a prime zone for shorting.

So tomorrow seems to be favouring a bit of pullback on the prob scale. I decided to get cute with reprsenting the probabilities and I represent them now as a ratio (bull to bear), which is so chicly and appropriately displayed with little rocket emojis.
I think, going forward, ideas I post, I will list the probs in this manner, just because they are visually easier to understand. You can see, for tomorrow at least, more bears are showing up than bulls. The ratio 5:0, meaning probability is favouring selling tomorrow.
So def looking for some pullback.

Targets for tomorrow are:

Bull
1. 93.36
2. 94.10
3. 94.84

Bear:
1. 92.94
2. 92.14
3. 91.34

Assessments of the most extreme targets (bull 3 and bear 3) show a preference for bull 3 at 4:1 favouring 94.84, which tells me that we may see a gap up into open.

Overall assessment and analysis:

You see on the Z Score indicator (set to the 50 candle mark) on the hourly chart it has triggered a sell warning. Sell warnings are triggered when the equity is approaching a previous pivot point on the Z Score scale.
It is also in minor overbought territory shown by the orange border.

You can see as well in the chart that XLE is at the top of its real time weekly range. It is also hitting the cap of its weekly prospective range, being 94.98.
Probs on the weekly favoured 94.98 at a ratio of 3:2.

Implications:
So what does this all mean?
Intra-day, look for pullback. Gap up followed by some selling.
But do not adopt an overly bearish mentality quite yet. This is still attracting quite a bit of buyers and while the 1 hour chart looks fairly bearish with a psedo-megaphone pattern and rounding top, we need to see the sellers chill out a bit and I would like to see a decline in the buying volume. We aren't really seeing a decline quite yet, just ranging between buys to sellers with no movement in either direction. We will have to see what next week brings.

As of right now, my immediate targets are the bear targets intra-day.

This is really the first time I am posting about XLE and was on request. Its a mid-week analysis which isn't all that helpful because the weekly high prob swing targets have already come to fruition. But if the interest is there, I can update with next weeks targets and probs and do an assessment on XLE as I do on SPY.

Safe trades everyone!

ALSO, FYI!
The Z Score you see in the chart is one of my publicly accessible, open source indicators.
The version I am using is going to be released as an update probably by the end of the week, I just need to do a video tutorial on how to use it properly.
If you are interested, here is the link:

Take care everyone!

2022年11月23日

註釋

This took out ALL of my bearish targets off open with its gap down. So have switched temporarily long biased off open.

2022年11月23日

交易結束：目標達成

Reached!