MACRO VIEW: XLE AT MACRO UNCERTAINTY, ON DOWNTREND RISK
Energy SPDR ETF is at macro uncertainty with a prospect of continued fall (much like the oil market)
On long term basis - XLE is trading below its 10-year mean at 68.5, signalling uncertainty - as price close to a long term means indicates an outlier event, with institutional traders unsure of what to do with the stock. The price is also close to a potential macro downtrend, as it trades close to 5-year downtrend border at 66 (lower 1st standard deviation from 5-year mean)
On short term basis - XLE confirms the downward risk, as price is trading very close to 1-year downtrend border at 67.5 (lower 1st standard deviation from 1-year mean). Thus if price falls below 67.5 it will have good probability of falling below 66, entering a downtrend on 5-year basis.
On long term basis - XLE is trading below its 10-year mean at 68.5, signalling uncertainty - as price close to a long term means indicates an outlier event, with institutional traders unsure of what to do with the stock. The price is also close to a potential macro downtrend, as it trades close to 5-year downtrend border at 66 (lower 1st standard deviation from 5-year mean)
On short term basis - XLE confirms the downward risk, as price is trading very close to 1-year downtrend border at 67.5 (lower 1st standard deviation from 1-year mean). Thus if price falls below 67.5 it will have good probability of falling below 66, entering a downtrend on 5-year basis.
