Wednesday, September 28, 2016

XLE Blows UP...09.28.16

I've made some comments recently about how news is proving to be a contrarian indicator.  Case in point XLE (the SPDR Energy sector ETF) which was widely panned yesterday as having virtually no chance of positive momentum into the Fall. All that changed in a flash midday today when OPEC announced a tentative agreement to curb production beginning in November. That news had the effect to pump XLE up 4.5% on massive volume as short sellers scrambled to cover.
What's the takeaway?
As a friend Lee Bohl says, "Ignore the news and follow the charts".
And in that regard what I find interesting is that the MVP mean regression model VPR. which has XLE as one of its focus ETFs, did a fine job of directing us into that trade last night.
Below note the following charts>>
MVP study of XLE (double 9.28 dates are a result of updating after hours)
130 minute bar chart of XLE with Bollinger Bands, RSI2 and MACD histogram.
VDX study as of today's close

Note: Delta Neutral update file is only available until the end of the month.