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Earlier this morning, an ADP jobs report was released showing that the private sector added 497,000 jobs in June, as well as sending Treasury yields higher. This caused stocks to slide pretty significantly as investors weighed the repercussions of these developments on the market.
This could be the beginning of a more meaningful pull back, not just one that results in a few percentage points here and there like we have seen in recent weeks since the market reentered bull territory. Regardless, there are still opportunities in the market that traders can take advantage of. Let’s take a look at one we see today:
Energy Select Sector SPDR ETF (XLE)
In the light of this fall by stocks, oil seems to be trying to put in a low of some kind, which may result in a move higher as investors flee big tech names and the stocks that have largely supported this bullish move to the upside.
If we look at the XLE, you can see some consolidation between 75 and 80. If oil can make a move to the upside, the XLE should follow closely on its heels. For the past several weeks, oil has also been in a consolidation pattern, hovering between 65-70.
If oil prices can break out of this consolidation through 70 on the back of the hot economic data that dropped then expect the XLE to also…
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