High Conviction Long Term Trades Print Money
Puts on XLE for me is a very high conviction long term investment. When you make one of these, it's good to have a reason for why you are doing it, so that you stick with it and the market doesn't shake you out with a little swing. So write yourself a few reasons *why* you are taking the trade.
1) I want to hedge my portfolio from more downside risks
2) Insider traders are selling this XLE stock at an ATH, and every single time they have ever sold it even almost this much, it crashed substantially
3) Commodities are a bad investment because they only go down over the long term. The market overestimates the importance of these short term supply chain issues and underestimates the capacity for free markets to solve problems over time.
4) Jim Cramer said to buy XLE, which is historically a very good indicator that it will crash down.
5) Just from the chart alone, we can see that *every* rally this asset has ever had, has always been faded. Don't tell me that this time is different, because that is what they said when they bought ARKK at $130 each before watching it bleed to death on high inflation and rate hikes.
6) The elliot wave structure of the XLE bubble seems to be peaking out
7) I see several retail traders pretending that XLE is a "safe" hedge for their portfolio. I don't think that retail seems to realize that XLE actually has historically maintained a VERY tight correlation with the stock market almost always, and that when the SPX and other major stocks start to crash this will absolutely bleed over into the energy sector.
If you have enough conviction, it's good to take a bet on it. Bet on your beliefs! Bet against me if you must, but at least have some damn conviction and don't capitulate at the first sign of weakness. Thanks for playing.
1) I want to hedge my portfolio from more downside risks
2) Insider traders are selling this XLE stock at an ATH, and every single time they have ever sold it even almost this much, it crashed substantially
3) Commodities are a bad investment because they only go down over the long term. The market overestimates the importance of these short term supply chain issues and underestimates the capacity for free markets to solve problems over time.
4) Jim Cramer said to buy XLE, which is historically a very good indicator that it will crash down.
5) Just from the chart alone, we can see that *every* rally this asset has ever had, has always been faded. Don't tell me that this time is different, because that is what they said when they bought ARKK at $130 each before watching it bleed to death on high inflation and rate hikes.
6) The elliot wave structure of the XLE bubble seems to be peaking out
7) I see several retail traders pretending that XLE is a "safe" hedge for their portfolio. I don't think that retail seems to realize that XLE actually has historically maintained a VERY tight correlation with the stock market almost always, and that when the SPX and other major stocks start to crash this will absolutely bleed over into the energy sector.
If you have enough conviction, it's good to take a bet on it. Bet on your beliefs! Bet against me if you must, but at least have some damn conviction and don't capitulate at the first sign of weakness. Thanks for playing.
Comment:
We have had the worst daily candle in all of over 700 days. This candle gives the bears confirmation and strong momentum to drive the prices lower, but it also means that puts are now *very* expensive. I will wait for implied volatility to be a bit lower to get my puts.
Comment:
I will just short it actually. No need to waste money on the volatility premium, but I don't want to miss the move waiting for volatility to come down.