Energy Select Sector SPDR (XLE) just flashed a death cross.

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XLE is a 10.87% component in SPY.

It is the first Select SPDR to flash a death cross signal.

We can see the key area to be watching for now is the November 2011 swing lows.

One scenario to keep an eye on is if the bears can break the November lows and turn it into a major resistance area that will cause some worry for the energy bulls.

USO has broken its November 2011 swing lows already. Same scenario to keep an eye on here also for the energy markets.

Vanguard Energy ETF (VDE)

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For Reference

The death cross (technical formation when the 50-day moving average drops below the 200-day) can be used as a filter to help narrow down the field. Next, use the Seven Steps to Better Stock Trading to evaluate the sentiment and price action. Better yet, sign up for The Select 20 Stock Picks or use my free Total Indicator for eSignal.