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A Spectacular Spike Top In The XLE

Published 07/04/2012, 12:12 AM
Updated 07/09/2023, 06:31 AM
NOTE
0.95%

Whether this pattern is viewed in 60-minute or daily form, it shows clearly and there can be little doubt that it will produce a reversal of some sort as suggested strongly by the 60-minute version directly below, but it is the degree of reversal that is likely the question.
XLE CHART 1

Let’s leave that question for another note with the XLE’s charts quite nuanced while this Spike Top has such a singular message, it requires no markings and it is supported by the downside gaps at $66.42 and then $64.54 and ones that will fill and probably sooner rather than later judging by the Spike Top.

But let’s look at it in the daily charts for levels and context with the pattern confirming at $66.87 for a target of $65.04 but with the aforementioned gap at $64.54 likely to pull it down along with a fraction gap at $62.92 that may or may not tug at it in the days to weeks ahead.
XLE CHART 2

Eventually it will close, there is little doubt of that happening, but its timing will depend on whether the Double Bottom above has already put in a partial fulfillment of its roughly $71 target as the Bear Wedge wins to take the XLE to its target of $61.47 or whether the bottoming pattern will go for a complete fulfillment by allowing the Spike Top to fulfill before pulling the XLE back up.

There are more reasons to believe the Double Bottom has done its work and something that sets up the potential for a nearly 10% decline in the near-term, but perhaps the decline stops just below the Spike Top’s target to fill the gap at $64.54 for a smaller near-term decline.

This is an exploration for another time while at this time there is little doubt that a spectacular Spike Top in the XLE will take it down.

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