The weakness in the Energy Select SPDR (AMEX: XLE) today has inflicted some technical damage to the near-term chart structure. Let's notice that the plunge beneath 77.10/00 has violated the up-trendline off of the August low, which has triggered downside follow-through to initial support at 76.00-75.80. Judging from the very negative juxtaposition of the price action and sharply declining RSI momentum gauge, I expect additional weakness to press the XLE towards 74.00 prior to any meaningful recovery rally period.

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

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