[ad_1]
In this article, we examine the significant weekly order flow and market structure developments driving XLE price action.
As noted in last week’s XLE Weekly, the primary expectation for this week’s auction was for price discovery lower within the context of an unsecured low. This week’s primary expectation did not play out as last week’s low was tested to 55.55s, forming a minor structural buy excess before price discovery higher developed to 58.20s ahead of Friday’s close, settling at 57.48s.
NinjaTrader
26-30 August 2019:
This week’s auction saw balance development, 55.96s-56.75s, in Monday’s auction above last week’s settlement as last Friday’s late buyers held the auction. Re-test of Monday’s high in Tuesday’s trade saw minor sell excess develop, driving price lower to 55.55s, testing the multi-week key support. Minor structural buy excess developed there, halting the sell-side sequence as price discovery higher developed into Wednesday’s auction to 56.93s. A minor pullback developed to 56.58s into Wednesday’s close where buying interest emerged.
Wednesday’s late buyers held the auction as a gap higher open formed in Thursday’s trade, driving price higher to 57.72s. Buy-side continuation developed into Friday’s auction, achieving the weekly stopping point high, 58.20s, within key supply overhead. Structural sell excess developed there as buyers trapped 58.01s/57.79s, halting the week’s buy-side sequence. Retracement ensued to 57.14s ahead of Friday’s close, settling at 57.48s.
NinjaTrader
This week’s auction saw a failed sell-side probe of key support early in the week. Price discovery higher then ensued to 58.20s within key supply overhead within the context of balance development at major support. Within the larger context, this week’s balance phase developed within a larger corrective phase from 64.66s into 2019’s major support area, 55.60s-53.30s.
Looking ahead, the focus into next week will center upon response to near-term key demand cluster, 56.40s-55.60s. Buy-side failure to defend this key demand will target key demand clusters below, 54.65s-53.36s/51.25s-49.93s, respectively. Alternatively, sell-side failure to drive price lower through this demand will target key supply clusters overhead, 58s-58.60s /59s-59.50s, respectively. From a structural perspective, the highest probability path for next week remains sell-side within the context of the larger structure.
It is worth noting that sentiment based on the S&P Energy Sector Bullish Percent Index’s decline from late July halted and balance continues. Stocks more broadly, as viewed via the NYSE, are continuing to see declining bullish sentiment. Asymmetric opportunity develops when the market exhibits extreme bullish or bearish sentiment with structural confirmation. Currently, conditions favor a neutral bias as sentiment diverges between the broad market and the energy sector.
StockCharts
The market structure, order flow, and sentiment posture will provide the empirical evidence needed to observe where asymmetric opportunity resides.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
[ad_2]
Source link Google News
