Get started

XLV

THE WEEK AHEAD: OIH AND XLV PLAYSAlthough earnings season continues to drag on here, a small financial media theme has emerged in this sell-off and that's that "Earnings don't matter" ... at least, at the moment. In keeping with that mini-theme, I'm looking at putting on plays in sector exchange-traded funds, and two of the ones that have been battered the most in this market have been OIH and XLV. My tendency with petro in the past is to play it directionally, although I have dabbled with nondirectional setups like iron flies, short straddles/strangles as well. Both types of setups could be productive here due to the underlying's high implied volatility metrics, which were above 45% as of Friday close. Here are two plays -- one directionally, one non- in OIH: OIH Synthetic Covered Call March 29th 26 short put Probability of Profit: 53% Max Profit: $271/contract Max Loss: Undefined Break Even: 23.29 Notes: Shoot for 50% max of the credit received. OIH Short Strangle March 29th 22/26 short strangle Probability of Profit: 64% Max Profit: $125/contract Max Loss: Undefined Break Evens: 20.75 put side/27.25 call Notes: Also go for 50% max of the credit received. The XLV Plays: March 29th 75/87 short strangle Probability of Profit: 57% Max Profit: $250/contract Max Loss: Undefined Break Evens: 72.50/89.50 Notes: Go for 50% of credit received. The spreads are showing wide after hours, so you'll have to run this setup to see if it's worthwhile during regular market hours. My guess: it won't pay 2.50 at market open ... . Synthetic Covered Call March 29th 86 short put Probability of Profit: 52% Max Profit: $505/contract Max Loss: Undefined Break Even: 80.95 Note: As with the short strangle, showing bid 2.81/mid 5.05/ask 7.30, so the metrics will change at open.
AMEX:OIH
by NaughtyPines
THE WEEK AHEAD: SNAP, FEZ, XLV, AND XRTWith four weeks or so until the next batch of earnings, I'm briefly turning my attention to exchange-traded funds to see if there's anything I can play to bridge the gap between earnings seasons. As with the previous several weeks, there isn't much; only three are near or above the 70th percentile for implied volatility over the past six months: FEZ, with an implied volatility rank of 86, and a background implied volatility of 20; XLV (68/17) (no surprise there; some friskiness associated with the failed Repeal and Replace measure); and XRT (67/22). I will look to work XLV and XRT with iron flies, possibly, but I may go directional on FEZ, since it's meant to replicate the performance of the Euro Stoxx 50. The other possibility is SNAP. It hasn't been on the block long enough for it to have a "6 month" metric of anything, but its background implied volatility is at 59%, and that's somewhat high for this market. Because of its potential for rippage, I think the best play in that is directional or where there is no directional risk on one side or the other (put diagonal, Jade Lizard, Big Liz). I'll putz with possible SNAP setups here and post separately if something looks particularly attractive ... .
NYSE:SNAP
by NaughtyPines
2
Long Term Sector RotationSPX 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 other 3. XLB is like the coyote / fox from Mickey mouse that runs a few meters off the cliff thinking its still running on solid ground before realizing that there's nothing below it and then falls like a rock. Great if you can time it right.
TVC:SPX
by iamajeya
5
S&P 500 Nov 11Wow what a push. We completed micro wave 1 of the larger wave 5. We are consolidating in micro wave 2. Not sure where that will stop but it looks like it wants to walk along the top of that blue wedge. Then a real big push up for micro wave 3 should occur next. And by the looks of Wave 1, I would say it should hit the top of that black upper trend line. That little red line at about 2280, is a 100% gain of the larger wave 3. Not sure if we hit that or start a rounding top for micro wave 5 just like 3 and 1 did earlier in the year. But who cares. This sucker is flying and if this keeps up, which it looks like it will, we will have that rate hike. And with a rate hike from these heights, the gains on the Vix should be enormous. Can't wait. If we do make it to that 2280 mark, look at the 61% Fib retracement for a correction. Its right near that bottom of that long term uptrend line. The point is, big money is ahead. Be ready for the drop. AND IT'S NOT A STOCK MARKET CRASH!!!! We will take off from after February and fly to the moon or at least much higher similarly to what happened in early 2016. We should reach 3000 by sometime in 2020. That's right! I said it. I don't care what you are hearing from the TV dumb asses. This ship will not go down until Europe and Japan go first. WE ARE THE CABOOSE! Always have been, always will be. And while Europe and then Japan fall apart, their money will find a safe haven in the US markets for a short while. Until its time for our Ginormous Super Hyper HOLY CRAP Bubble to burst. We should start to see perhaps a rounding top in the year 2020. And then it will be time for the cycles (Plural) to bring down the house. If you want to know how far down, Just draw a trend line from the bottom of the 2001 crash, then the bottom of the 2009 crash and extend it to about 2022. Then you will know just how bad its going to be. Personally, I am selling my house in the year 2020. No Joke. I'll by a mansion in 2022-2023 for a Yuge discount. But I am getting ahead of myself. Lets just focus on December 15th - 16th. Good Luck
TVC:SPXLong
by SalN
1