A Journey Full of Danger

You just knew there would be the inevitable adversity as energy stocks embark on their journey to cement a major bottom. Just this morning, for example, the sector is fighting to shrug off FANG or Diamondback Energy's roughly 13% post-earnings selloff. 

The good news is that Whiting Petroleum (WLL) actually went green this morning off its own earnings miss, though I see it is now back in the red. 

But the larger point is that the energy sector ETFs, OIH XLE XOP, are hanging tough in the face of these earnings dumps and must continue to do so in order to advance the theory that the sector has bottomed. 

As we speak, crude itself is green, and the OIH ETF for oil service stocks, below on its daily chart, is backtesting its 50-day moving average (Dark blue line, arrow). This seems like a standard test and not a violent rollover, but the test still needs to hold for bulls to declare progress is being made. 

Elsewhere, we have another morning of quiet index action as many stocks pause or dip. All things considered, some cooling off type of action is entirely proper.

To repeat a theme from earlier this week, though, the small caps in the IWM must avoid another round of $160 rejection here if they hope to break the rangebound pattern for over a year now which would include a likely trip back into the $140s.