SPX vs Major Sectors. I added IBB to cover Biotech. Please comment. My understanding at this point is to stay in sectors which have good fundamentals and have been relative laggards. The 3 bottom ones at this point seem to be Financials, Technology and XLU / XLP. Since utilities is a risk-averse sector, so in a pro-growth environment I may want to go with the...
XLU is a massive, highly liquid fund that only invests in utility companies that are included in the S&P 500. It is one among the cheapest and most liquid options. I am expecting a structural break down. Will only enter if the relative upward strength or the volume of the pair runs out. I have identified the same structure on RSI below. Have a look.
After I pulled off the short call of the Dec 2nd iron fly at near worthless today, I rolled the short put side out to the Dec 23rd expiry to give it a little more time to work out, as well to be able to work the call side of the setup effectively. (I have a setup in the Dec 30th expiry already, so didn't want to roll there; Jan was too far out in time for my...
XLU is ranging around $46-$47 right now and developing a shampoo pattern (head & shoulders) on the 1 Year chart. I sold a straddle and I'll get out as soon as I can. Each support and resistance has a roughly twin shoulder going back to Feb. Temporarily neutral to allow the formation to develop.
Adding to my core exchange traded fund fly positions here with this high implied volatility rank underlying. (I already have some XLU on, so just adding a "smidgeon" here). The implied volatilty in this isn't great, but then it's almost never "great" ... . Metrics: Probability of Profit: 46% Max Profit: $210/contract Max Loss: $190/contract Break Evens:...
XLU have a 86% IV Percentile, which means that 86% of the days over the past year the Implied Volatity was below this level. Custom Put Ratio's Buy +1 NOV 48 PUT Sell-2 NOV 47 PUT BUY +1 NOV 46 PUT SELL-2 NOV 45 PUT This will give us a max profit of $171 with a 77% chance of making money. And we only lose if the price goes below $44.64. Since we are adding...
As long as utilities' performance is weaker against cyclical, we can expect bull market to continue - i.e. expect the ratio (price) to stay inside the channel. If the ratio (price) breaks the channel above, asset managers are moving more aggressively to defensive stocks, which means that they are anticipating that the economy is slowing significantly - i.e. the...
The underlying implied volatility in XLU is not very high, but it's high relative to where it's been the last 52 weeks (currently, 72 (Dough 52-week implied vol percentile)). Here are the metrics for the setup: Probability of Profit: 43% Max Profit: $175/contract Max Loss/Buying Power Effect: $175/contract Break Evens: 46.75/50.25 Notes: As you can see, this...
I haven't done many of these in the past, but I'm beginning to warm up to them, particular with instruments that wouldn't ordinarily yield jack diddly squat with a traditional iron condor setup. Here's how this iron fly compares to an iron condor with similar break evens (it would be a Nov 18th 43/46/48/51):* Probability of Profit: Fly: 52% Condor: 52% Max...
Frequency & Symmetry are good tools to trade off. P!
Will Utilities volatility spike coincide with stock market volatility spike this time? I think it's worth a bet.
It seems if there is no crash in Utilities, then there is no crash in the stock market, we need to watch the lines here. Utilities are very high right now.
$XLU continues to range inside the PRZ of a Daily Bat pattern. Two successful sells I had on this one.. Will the third one be the one that will lead $XLU to its final destination? 45-46$ is my final target zone for this setup Tomer, The MarketZone Follow me on TradingView Subscribe to my newsletters - goo.gl Follow my blog - goo.gl Subscribe to my Youtube...
The Bat pattern I've mentioned in the past for $XLU was completed last week. As you can see there was minor bearish reaction to my harmonic sell zone. $XLU is very close to 50$ so we may see it try to touch this psychological level.. that's usually what happens. The bearish scenario for $XLU requires a stop loss above 50.5$ with nice R/R as I aim for 47$ as my...
I think we could see 45.50 sooner than later
The XLU has recentlly reached it's high of early 2015 near $50 which seems to offer strong resistance. A double top seems to be in process. Elliott waves count of 5 waves is completed, a correction seems to have started towards the $46.70/$45.35 area, The wave III should just have started, a fast drop is expected. RSI (5) and MACD are showing beairhs divergence...
A series of events took place causing me sit back and contemplate market participants (in)sanity. First, it is known that I've was one of the first to stick my neck out and tell it how it is – the U.S. Is facing a recession in 2016 – last April. Soon after, various investment banks flirted with the potential but gave the very realistic situation very low...