Sectors Relative to QQQ

Sector Funds vs S&P 500

Game Over

Repo is inverse with XLF, not on XLE.

Energy ETF Ratio

Weekly Puts on XLE Again

I put the weekly put trade on again.

I'm Shorting the Gap

That's quite the gap that's opened up between XLE and CL. There's a roughly 20 percent peformance gap open. It can go wider, 30 percent wouldn't be impossible, but this type of directional gap where one rises and the other falls is rare. This isn't necessarily going to close then, but the inverse correlation should end. Since XLE looks like a double-top here, I see XLE as offering similar downside potential as CL or USO, but without outperformance potential (for short positions) should the gap close.

Here's how performance went in 2014 and 2018. The latter looks more relevant to me given rising rates and falling stocks as part of the backdrop.

Energy

I made a lengthier post over at Subtack. This is the most important chart for me today. Energy should breakout given the news from China and the general bullishness. The horizontal is at $93.48. How energy trades is important for inflation readings. My view is that a failed energy breakout is probably bearish for stocks in the short-term, but bullish heading into year end. A breakout in energy is probably a signal the rally in stocks can continue short-term, but that a surprise reversal could be coming before year-end.

Energy Double Top Intact

Energy hasn't moved up with the market the past couple of days.

Short Energy However You Like

Exit above the horizontal, but I won't use a hard stop. I will allow for possible chicanery, something like a pop up at the open on Monday that fails. To give my thinking here though, I don't think any such pop is coming.

Short XLE At the Gap

Tight stop here. Expectation is broader market weakness could touch off signficant selling. Broader market shows no sign of weakness yet, but this has stalled at the moment.

XLE Fills the Gap

Watching for a short entry.

Energy Surges

I closed my last energy short positions yesterday. I still think it reverses, but there is room to run if interest rates and the U.S. dollar reverse. The market is already getting close to a euphoria high move.

At some point I may have to hedge by running for Congress as a far-right politician. The public will be clamoring for blood if inflation turns higher again.

There is a gap ahead on XLE though. Last stop before a double-top or new all-time highs.

Crude-Energy Gap Hits 25pc

The gap between where crude is trading and where energy has traded at that crude price, has opened up to at least 25 percent. As in, if crude drops I expect a 25 percent loss for funds such as XLE at a minimum. Of course this gap can close the other way with crude rallying. Since I'm bearish on crude though...

Keep Shorting Energy

These are 2x inverse energy sector stocks.

All My Positions

I have short positions of varying size on all of these. In terms of number of options, XLP is by far the largest position. By dollar size, CME, APPL, MCD, SHW are relatively large. If I group together all my energy positions XLE, COP and USO, that would be larger than everything, but some of these are weekly puts that I may take off early next week if crude doesn't dip quickly. XLP puts are cheaper though, and thus I anticipate they could be my largest position at the conclusion.

Update: I forgot to list BITI calls, a short position on BTC.