RIG monthly back-tests, high probability using game theory.RIG monthly back-tests, high probability using game theory (and macro/b-cycle). Price action following.. Self explanatory.
XOP
RSI AND VOLUME FLOW POINT TO DIRECTION SHIFT IN XOPXOP
Using $XOP as representative of the Oil and Gas Exploration Industry.
Pearson's R^2 = 0.95 indicating strong tendency for signal to centralize around its multi-year linear mean (LM, 150.22).
Signal currently resides just above the lower third standard deviation (-3) off the linear mean(LM).
Statistically speaking it would be tough to hold this position for very long and I would expect for signal to either breakdown below the (-3) or mean revert upward toward the LM in the next couple weeks.
In this case a mean reversion up to the LM at 150.22 would be necessary for the current multi-year trend to be maintained at its current trajectory.
Trend breaks down with signal below the -3 (119.06).
Price declining into stronger relative strength and positive volume flow (VFI) can be a sign of the market 'absorbing' price at these levels.
This can be indicative of 'seller exhaustion' and often precedes an 'increased potential' for a directional change in price trend.
(NOT FINANCIAL ADVICE)
Opening (Margin): XOP September 15th 113/148 Short Strangle... for a 2.66 credit.
Comments: Short put for the IRA (See Post Below); short strangle for the margin.
Selling the 16 delta strikes on both sides. 2.66 credit on buying power effect of 12.98; 20.5% ROC at max; 10.3% at 50% max.
Opening (IRA): XOP September 15th 110 Short Put... for a 1.11 credit.
Comments: Selling premium in one of the exchange-traded funds at the top of my IV screener with a 30-day at 32.2% -- more than twice that of the broad market. (The others are GDXJ, at 35.2%; GDX, 31.2%; and EWZ and FXI, both at 29.1%).
As with my broad market plays, targeting the <16 delta strike in the shortest duration paying around 1% of the strike price in credit.
On a side note: My goals as primarily a premium seller are really simple: put on a given amount of theta/risk premium on a weekly basis, with my preference being for selling premium in (a) broad market exchange-traded funds; (b) sector exchange-traded funds; and (c) single name, in that order. Broad market is kind of sucking a bit here with SPY at 13.6% 30-day IV, QQQ at 20.0%, and IWM at 19.9%, so just looking for a little bit of extra "sumthin' sumthin'" to keep that theta pile on and burning.
Xop no impulse yetxop, might have more room to the downside.
It is not yet showing a 5-wave up.
We might see a retest of wave 4 untill we can call the correction completed.
XOP Bullish move through $150 Clearly, anyone tracking the recent Saudi cuts in oil production understands that this mixed with the new Chinese trend of buying oil in yuan and creating the "petroyuan," will generate a price increase based on supply/demand fundamentals.
Rolling (Margin): XOP Dec 16th 127C/147P to Jan 20th 130C/147P... for a 3.67 credit.
Comments: Rolling for a realized gain with this down move. There was no 127 strike, so rolled the short call to the 130 and the short put "as is." Total credits collected of 28.47 on a 17 wide inverted. Resulting delta/theta -38.14/15.30 with 13.43 of extrinsic, so I'm indicating here that it's a "short" position.
Still looking at this for tax loss harvest, but wanted to give it an additional chance running into year's end to make something of itself.
Crude Oil Continues To Slide Downward - $55~65 on target.Did you follow my research from late October/early November?
So many people thought Crude Oil would climb higher on supply concerns (related to Winter/Europe). But here we are sliding below $75 (soon) and targeting the mid-$60s.
My call from October was that we may see $64 to $67 as a base. Now, I'm thinking we may see $54 to $57 as a base.
What is going to prompt demand for Oil when the world is struggling with post-COVID inflation and the US is in the early stages of a moderate recession?
The post COVID commodities recovery phase pushed Crude well above $110 for a while, but now we are starting to transition back to "normal" in terms of true supply/demand.
In my opinion, Crude will settle between $55 ~ $65, then attempt to find some support.
Follow my research.
BLUE LINE - Last Support For Crude OilIs this it? Headed into the end of 2023 - are we going to see Crude Oil fall below $76 ppb as COVID & economic concerns trap the global economy into a contraction phase?
My research suggests Crude Oil will attempt to find support near $63 to $65 before attempting to bottom. From current levels, this suggests a -$30 ppb downward price trend is likely.
Two things are likely driving this trend:
Lack of global demand
Inflation/Price concerns
Has the current Flag/Pennant reached the APEX and is price attempting to break downward?
Time will tell...
Follow my research.
Rolling (Margin): XOP November 18th 127 Short Straddle... to the December 16th 128C/133P inverted short strangle for a 4.02 credit.
Comments: Rolling out at 21 days to go to reduce "random" assignment risk on the short call. Total credits collected of 21.96.
I've gone slightly inverted here as well as improved the short call strike a smidge to keep the short delta metrics similar to what they would be were I to be in a covered put with a 40 delta short leg. This results in delta/theta -60.27/15.68 with a call side break even off 149.96. A "perfect" finish would be in between the strikes, but I'm looking to basically scratch this out or make something small on it.
Double Top In Crude Oil - Are You Ready For The Move Below $75?Don't fool yourself with the idea that Crude Oil will continue to climb higher. The world is in a contractionary phase and Winter/COVID issues continue to plague demand.
Crude Oil will slide downward as demand weakens into 2023.
I expect $75 to $76 as a base level near the end of 2022. Then, possibly falling toward the $61 price level.
Follow my research.
Rolling (Margin): XOP October 21st Short Straddle to November 18... for a 6.93 credit.
Comments: Rolling this out "as is," betting that this weakens ... eventually. Total credits collected of 17.94. Resulting delta/theta of -46.61/22.04 with break evens of 109.06 on the put side; 144.94 on the call side.
XOP DiversionA clear Diversion can be seen from the RSI and the recent price action. This suggests a near term return to lower prices as current ones are not supported by volume.
Oil & Gas to NEW HIGHSXOP - is in the same type of consolidation it has been TWICE prior to its' current location. It has already bounced off of $114 support level. I'm anticipating the price running to a resistance level of around $180 with a pull back which would launch it THROUGH the $180 level which it hasn't been over since 2015. If current market condition continue running its' course, $330 is very possible in 2024.
These are just observations and NOT predictions.
Rolling (Margin): XOP October 21st 160 Short Call to the 127... for a 4.33 credit.
Comments: Rolling to short straddle at the 127. Total credits collected of 11.01 versus the setup currently marking at 16.13. Resulting delta/theta of 22.28/23.54 with a cost basis of 115.99 if assigned on the 125 put.
Rolling (Margin): XOP October 21st 165 Short Call to 160... for a .51 credit.
Comments: Smidge of delta adjustment here. Total credits collected of 6.68. Resulting delta/theta of 13.99/17.18 with the setup marking at around 6.22. I rolled this once for duration already, so probably should just take profit here and move on, but wanted more than .46 ($46) out of it. We'll see if that bites me in the hinder or not ... .
Rolling (Margin): XOP Sept 16th 142/159 to October 21st 127/165... for a 1.76 credit.
Comments: Was hoping price would stay more centered in my setup running into September mopex, but ... nope. Rolling out/recentering risk with 14 days to go. 6.17 total credits collected relative to the 127/165's marking at 8.02, so it's still a bit underwater. Delta/theta at 1.58/16.78.
8/31/22 XOPSPDR S&P Oil & Gas Explor & Product ( AMEX:XOP )
Sector: Miscellaneous (Investment Trusts/Mutual Funds)
Market Capitalization: $ --
Current Price: $144.75
Breakout price: $147.00
Buy Zone (Top/Bottom Range): $140.20-$120.00
Price Target: $166.70-$170.60
Estimated Duration to Target: 76-80d
Contract of Interest: $XOP 11/18/22 145c
Trade price as of publish date: $13.20/contract
Rolled (Margin): XOP September 16th 135/145 Short Strangle... to the September 16th 142/159 short strangle for a 4.94 debit.
Comments: Up to this point, I had collected a total of 9.35 in credits. Instead of rolling out a month, I opted to pay a debit to recenter risk here intraexpiry (basically to an expected move setup) in order to give it a chance to work out this cycle (while temporarily reducing assignment risk, since I moved the short call from in-the-money to out-of-the-money).
Total credits collected now 9.35 minus 4.94 or 4.41 relative to a current value for the 142/159 of 7.15 at the mid price . -1.03/25.55 delta/theta.
OXY jumps on News Catalyst (Buffet) BUY LONG NOWNYSE:OXY
Massive Bullish Candle takes out 90 days of price action
See the chart for more analysis
Time is of the essence as they say; buy now or do not chase !
Rolling (Margin): XOP Sept 16th 123 Short Put to 135... for a 2.31 credit.
Comments: Rolling up the untested side to delta balance with 28 days to go. Total credits collected of 9.35 with a resulting delta/theta of -21.12/22.65. The 135/145 is marking at 10.18 at the moment, so still slightly underwater with the setup leaning net delta short.
Rolling (Margin): XOP September 16th 118 Short Put to 123... for an .81 credit.
Comments: Small delta adjustment here in my short strangle. Total credits collected of 7.04. Resulting delta/theta -20.58/17.32.
Opening (Margin): XOP September 16th 118/145 Short Strangle... for a 6.23 credit.
Comments: High 30-day IV at 49.0%. Selling the 25 deltas on both sides. 6.23 on BPE of 13.99. 44.5% ROC at max as a function of buying power effect; 22.3% ROC at 50% max. Delta/theta -.24/14.96.
