Something is Wrong with Energy

According to the bible on seasonality – The Stock Traders Almanac, the strongest North American Energy trading window is from December through to July. Now the only thing I know about seasonality is that annual seasonal publications will occur once a year and they will say the same thing as the year before. So in this case seasonality works – otherwise any other seasonal call should be confirmed by technical analysis.

I reason if a seasonal call must be supported by the technical picture when you may as well just do the technical work. When you look at the North American Energy sectors in this case the iShares CDN S&P/TSX Capped Energy Index Fund (XEG) and the Energy Select Sector SPDR (XLE) you get the same troublesome signals
When we study a weekly chart of the XLE we see our Spread MA is printing a series of lower highs of relative perform vs. the U.S. dollar beginning October 2009. Note also the trend line break at the week ending January 29, 2010. Also of technical concern is that apparent triple top formation. A triple top is rare but deadly. It is a price pattern with three prominent peaks, similar to the head and shoulders top, except that all three peaks occur at about the same level. Triple tops usually form over a 3 to 6 months time frame. Our Level I and Level II seminars cover all this material. The current Oakville dates are May 4 and May 6, 2010. To enrol visit www.gettingtechnical/seminars our use this link: http://www.gettingtechnical.com/07_seminars/index.shtml