Today's weakness in the Energy Select SPDR (AMEX: XLE) coupled with the developing downtrend in my daily RSI pattern suggest strongly that last week's near-vertical advance indeed was a vicious counter-trend climb to a lower-high, rather than a new upleg.

My work is warning me that the energy complex in general, and the XLE in particular, is in the early phase of a developing intermediate-term top formation that may take some additional time to mature, but which also will press the price structure towards a confrontation with its rising 200 DMA (now at 66.50) in the near future. Major components Schlumberger (NYSE: SLB), Exxon (NYSE: XOM), ConocoPhillips (NYSE: COP), Chevron (NYSE: CVX) all look like their individual chart structures are rolling over.

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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