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XLE

THE WEEK AHEAD: GPS EARNINGS; KRE, XLE, EWZ, IWM/RUTEARNINGS: Only one underlying makes my cut for a earnings announcement volatility contraction play: GPS (25/70/14.9%),* which announces on Tuesday after market close, so look to put on a play in the waning hours of Tuesday's session. To me, it's small enough to short straddle, with the pictured setup paying 3.72 (.93 at 25% max). Alternatively, go short strangle: the December 18th 22/29 was paying 1.25 (.62 at 50% max). Of a defined risk bent? Go iron fly with the December 18th 20/25/25/30 and get better than risk one to make metrics, with the setup paying 3.00 even as of Friday close (.75 at 25% max). EXCHANGE-TRADED FUNDS RANKED BY BANG FOR YOUR BUCK (JANUARY 15TH EXPIRY): KRE (22/40/14.0%) (Yield: 3.43%) XLE (25/43/12.5%) (Yield: 6.15%) EWZ (17/43/12.2%) (Yield: 2.89%) GDX (13/37/11.7%) (No dividends) SLV (22/37/10.8%) (No dividends) BROAD MARKET RANKED BY BANG FOR YOUR BUCK (JANUARY 15TH EXPIRY): IWM (24/30/8.5%) QQQ (20/26/7.6%) SPY (18/23/6.2%) EFA (16/19/5.3%) * -- The first metric is volatility rank/percentile (i.e., where 30-day implied volatility is relative to where it's hung out the past 52 weeks); the second, 30-day implied; and the third, what the December at-the-money short straddle is paying as a function of stock price ("Bang for Your Buck").
G
by NaughtyPines
Sector Winners and Losers week ending 11/20Energy (XLE) was the big winner of the week for the second week in a row. Additional positive vaccine news signaled the possibility of several sectors recovering and driving demand for oil and gas. After a poor performance last week, Technology (XLK) followed closely the performance of the S&P 500 index. Utilities (XLU) performed the worst this week, although it was the best performing sector during Friday trading. Health Care (XLV) also did not have a great week, spending much of the week as the worst sector until the honor was passed to Utilities.
SP:SPX
by drewby4321
Rotation hedge with Energy ETFOk boyz, so you guys are strong believer in momentum, you've ran your backtests on US Sectors and fund out that with a roughly 55% probability the best performers of last year will be the best performers of the next year. So you are still long tech like crazy and believe the FAANG stocks will keep rising. However what does financial professionals like to do? They hedge part of their risk, they maximize their sharp ratio by minimizing volatility with diversification in uncorrelated assets. What is your biggest risk right now? With a new vaccine on the way? => A big rotation of smart money from leaders (tech, healthcare) to laggards (Energy, Financials, Transportation, REITS). It's already happening right now. XLE US is down 45% year to date, it is the ultimate laggard ! And you know what? Historical probability of worst laggard to move to the top five leaders of next year is 65%, odds are in our favor. The ETF showed strong momentum last week with a nice weekly hammer candlestick with strong volume, this is a bullish reversion pattern. Let's wait for confirmation on Monday's open, if it confirms, we are catching the first wave to a nice ride up ! up to recovery and post covid world. The vaccine wont be massively available and massively distributed before mid 2021 I believe, HOWEVER the stock market is merely the second order of the real economy, not the first order! It is the acceleration of the economy, so as soon as the vaccine is being shoot the first person, the widespread reopening will increase tremendously. Option 101 => acceleration = second order = GAMMA, we want to be long gamma right now => buy calls 3 months on XLE. To save some carry cost, i would suggest a strike at 110% of the current spot, this translate to a roughly 35% Delta. This is quite out of the money but i believe the volatility on this sector is going to up with the spot. my pick : call 31Mar2021 strike 37. Delta = 24%, Remember: this strategy makes sense if your portfolio is globally long tech, and please do not risk more than 5% of your portfolio value with the premium. This is not WSB :D
AMEX:XLELong
by MarketHitchhiker
Sector Winners and Losers week ending 11/13Energy (XLE +17.11% WoW) was the clear winner of the week. Straight out of the gait, Energy benefited from the news that an effective vaccine could be available soon. The Energy sector would benefit from the economic recovery of several of sectors including Transportation, Travel and Leisure. Financials (XLF +8.29% WoW) followed in a distance second. Banks have a lot to benefit from an economic recovery including higher yields in bonds as investors move back into equities. Those two sectors stood tall above the rest who all performed more closely to the S&P 500 performance. Technology (XLK -0.31% WoW) was the only sector to end the week with losses. A clear metric of what we already knew - that investors rotated out of popular technology stocks that benefited from the pandemic lockdowns.
SP:SPX
by drewby4321
Nasdaq, What happened in October?Note: You can click the Yellow markers in the chart and read the Daily Updates for that day. 2) President Tests Positive for COVID, this announcement comes afterhours sending futures to the negative. Eventually he is checked into the hospital for close monitoring. 5) Just a few days after the COVID announcement, the president returns to the whitehouse touting the effectiveness of the drugs used to combat the virus. 6) After pushing for stimulus agreements from the hospital, the President abruptly declares they would no longer seek a stimulus agreement until after the election. This reverses an otherwise positive day for the market. 8) Some positive messages from the President and congress renew hopes for stimulus. This back-and-forth news on the stimulus becomes a hallmark for the month. 12) Although a positive day for the market, this is the pivot day, so it’s worth taking a look at some key signals from the day. Positive +Huge gain on increased volume. +IBD Follow-thru Day for Nasdaq. +All my daily update trend lines are on upward slope. Negative -ADVQ/DECLQ is downward trend last two days. -T-Bond Yield Spreads peaked 10/5, trended down. -Put/Call Ratio back near 0.60. Interesting * This is also pivot day where Biden/Trump polling starts to edge back to Trump. * From this point XLK moves from the 2nd best sector (behind XLU) in the month to worst by end of month. * XLU remains relatively strong thru October. 13) A sideways, inside day with poor closing range. 14) Still trading inside Monday’s range, but down on lower volume. FSLY surprise guidance announcement after hours tanks the stock price by 30%. 16) 4 out of 5 of my trend lines in my daily updates show a negative expectation 19) All sectors are negative with XLU performing best 20) From this point, daily volume shrinks except two big sell-off days. SNAP is up 30% after hours following earnings beat. 21) Growth favorites (PTON, DDOG, FVRR) are pivoting downward. 23) The week ended with a character change, two days of high closing range, lifting hopes for Monday. 26) Hopes are dashed with weekend news. Pandemic reaching new heights in Europe, and SAP revises guidance down impacting many Enterprise software stocks. This is the first close below 21d EMA since September. 27) Index is up, but there are more decliners than advancers. Growth stocks rotating winners/losers, as if investors are searching for strength. 28) Mega-caps (all companies above 200B) lose on the day. All sectors down. Ouch. 29) AMZN, AAPL, FB, SHOP offer positive earnings, but sell-off after hours as new lockdowns in Europe are announced overnight. 30) Ouch. Ouch. So here are some broader observations as we close the month of October: A) First the facts. -2.29% loss on the month (not as bad as September). The monthly candle has a tall upper wick, 33% red lower body and an 8% closing range. B) The VIX went past the highpoint in September and reached the highest point since June. C) XLU (Utilities ETF from S&P500) was defying gravity, holding up better compared to most sectors as well as the Nasdaq. However, this past week it has come down with the rest of the market. D) XLE (Energy ETF from S&P500) propped up the market 3 times after oil announcements only to deflate again the following days. E) The 21d EMA is still above the 50d MA for the Nasdaq. That 21d EMA is below the 50d MA for the other major indexes. It is also trending to go below on the Nasdaq in the first week of November.
NASDAQ:IXIC
by drewby4321
Sector Winners and Losers week ending 10/23This week it was all about Communication Services (XLC) with the positive earnings beat from Snap (SNAP) driving growth in many of the social platform company stock prices. Utilities (XLU) continues to be a safe bet for investors as a sector that is consistently performing well over the past few weeks. Financials (XLF) also had a great week as bond yields are increasing which is usually a good sign for performance of banking stocks. Consumer Discretionary (XLY) started the week on top but backed off a bit before coming back with some good gains on Friday. Energy (XLE) had a huge Thursday that put it at the top of the the sectors, but it could not hold the lead, backing off a bit on Friday. It's not often that we find Technology (XLK) at the bottom of the list for weekly sector performance. Keep an eye on it as many technology companies will have earnings in the next two weeks.
SP:SPX
by drewby4321
Sector Winners and Losers week ending 10/9Utilities (XLU) was the steady winner throughout the week, even during the pullback caused by fears of no stimulus deal being reached. For money that wants to stay in equities in lieu of low interest rates and uncertain inflation, utilities is seen as the safest sector. So even as stimulus fears mounted, XLU continued to stay strong compared to the S&P 500. Energy (XLE) also had a great week with a big one day gain of 3.75% on Thursday thanks to stability in crude oil prices and analyst projections of strong demand for at least two decades. XLE growth still lags far behind recent gains in crude oil futures. It will take some time to burn off over supply and the tech bubble continues to weigh down this sector (redux of 2000 energy story). However, Technology (XLK) rallied on Friday to take over the second place spot. Advance/Decline lines showing great breadth as big tech shares the love with their smaller siblings. Communications (XLC) was the week's loser, with Facebook (FB) having the most weight in the index. FB did not have a great week, possibly impacted by political focus on the platform.
SP:SPX
by drewby4321
Oil and Energy Markets finding a Perfect Storm?It wasn't market makers who named the latest U.S. Hurricane "Delta," but they probably would have suggested the same name if anyone asked them. With the storm about to hit the gulf shores in the U.S. causing lockdowns in oil and gas facilities in the region, supplies of oil and natural gas are both constrained. This comes right at time when demand is increasing in the U.S. economy, and buyers are returning to the market. It could be a perfect storm for the Energy sector AMEX:XLE in U.S. stocks, and for commodity currencies such as the Aussie FX:AUDUSD , Loonie FX:USDCAD , and Pound FX:GBPUSD .
AMEX:XLELong
by gordonscottcmt
Energy and Financials Adding To SPX Strength In ATH RunSPX with a key back test of the 3389 level overnight as it's trying to break up over the 3411 level. If it can over 3411 it should trigger a test of the key 3425 level. This is a key level from our double top back in September. SPX is opening stronger than NAS and this is mainly because of energy and financials. If energy and financials are able to join this rally, SPX will run to ATH's and beyond. October is shaping up to be a very bullish month with the potential for a very large rally.
OANDA:SPX500USDLong
by TradingWithTrends