XLP trade ideas
ridethepig | Consumer Staples (Chapter 2)The following diagram illustrates the breakup of a globalisation advance:
Since the retrace in VIX has found a hard floor into the 25 lows, we may characterise the advance as an endgame for our economic cycle purposes.
Now the erroneous nature of Volatility advancing can be seen. The effect of demobilising the consumer will weigh heavy on Equities, not to mention how companies position capital more defensively going forward.
Consumers are uncomfortable (at least from Q3/Q4 onwards) right on time for the stimulus to fade.
The following swing, which will also be quoted in the previous leg in DAX is another example. I will go over the flows briefly at this point:
Equities have now lost all sense of reality, the concussion in addition to Fed conceding far too much mobility; so this may rightfully be classified as the end of an economic cycle, or at least until capitalism returns from its sabbatical.
XLP - ABC wave patternXLP : Price action confirmed bearish cycle on the way after completing simple ABC in (X) wave. It started moving down in (Y) wave, So bounce can be used to sell for Y wave.
It dropped in five wave A today along with SPX and other sectors, so pull back of wave B will be good sell for C down. Wait for 2-3 days to pull back in wave B.
ETFs SECTOR ANALYSIS - PERFORMANCE CHART DAILYI hope this will help you, don't consider this as an financial advice.
Clear as mud or crystal clear?Are you dizzy and nauseated by the market action this week?
Are you a bear feeling like you are a wreck and on the wrong side of the camp?
Are you a bull feeling like the 'V' shaped super recovery is grinding into high gear?
Well, that's how bear market rallies are supposed to make us feel.
It's dizzying because of the divergence.
It's nauseating because of the high magnitude moves in both directions.
Bears feel rotten because the market wants us all expelled.
Bulls feel fantastic because the market needs to reel them all in until the last moment.
Every sector is clear as mud except for this one.
XLP tells me, I have made an impulsive move down, clearly in 5 waves,
I have made a powerful corrective rally, clear in 3 waves.
I have started setting up the next impulsive move down, so be prepared.
The big boys have fooled most of us and are about to hit EJECT.
Good luck all!
XLU (bearish) bias. 23:17:29 (UTC) Mon Apr 6, 2020XLU (bearish) bias. 23:17:29 (UTC)
Mon Apr 6, 2020
XLP - trade for the reopening of the economy If you don't want to pick food stocks this stock has 6 industries in it. Beverages Industry, Food & Staples Retailing Industry, Food Products Industry, Household Products Industry, Personal Products Industry, Tobacco Industry. This is everything everyone horderd or business that needed to shut down that will need to reorder once open. I see a nice move in this coming soon if we get the go ahead to open over time.
XLP - when staples down as much as market you know it's troubleSimilar story to Utilities
When defensives are down as much as the market (-5%) you know you are in trouble
Again, I would have to say this seems like throwing the bay out with the bath water type of investor selling (indiscriminate) so we may be getting closer to a short term oversold low
XLP/XLY rel strength - Only bearish leading indicator I've foundStaples have been outperforming Discretionary for a few months, but looks like trend could break soon
XLP Short (Trade 1-4 weeks)1) XLP is on a DeMark 9
2) RSI oscillator is overbought
3) Macro view: XLP under performs in an environment of growth slowing and inflation accelerating
OPENING (IRA): XLP JAN 17TH 52 SHORT PUT... for a .40 credit.
Notes: Another "not a penny more" short put with a resulting cost basis of 51.60/share if assigned. As with my XLU and HYG not a penny mores (See Posts Below), will look to roll "as is" for a credit on at least a quarterly basis until assigned or that's no longer productive. Current yield of 2.99%; $178 annualized on a one lot ... .
This trade kind of rounds out what was on the remainder of my IRA shopping list which has focused on dividend yielders like IYR, HYG, XLU, and XLP. I'm already in IYR covered calls and in HYG and XLU short put plays.
Nice doubletop and downside divergence on XLP daily chartspicked up some Oct 11 60.5 puts for 21 c MACD says price sb around $60 or below.
XLP/SPY-Long consumer staples relative S&P500.
-Sector roation.
-Long if price trades above the 38.2 % fib levels.
-ISM < 50
-Moving Average almost crossing.
Con:
-Bearish flag formation.
XLP 200MA Trade and Seasonal DefensiveXLP has bounced off the 200MA. The last two moves pushed slightly through it, like this one, and the subsequent ramp was at least to the previous high (Feb-Mar) if not higher (Jan). The 2018 price/action below the MA shows this stock does take that indicator into account.
The recovery looks to be finishing the final sub-wave of W3. March shows a slight pullback, so entering at 57 with a 1% stop (56.45) and a target of 59 (Jan 18 ATH) gives an RR of 3.64.
XLP is of course a seasonal defensive.
EPISODE 8/11: US CONSUMER STAPLES:WAVE+CHANNEL&INDICATOR TA(XLP)Episode 8/11 : US (SPX) Sectors Technical Analysis Series - 18th of July 2019
Brief Explanation of the chart:
XLP : Consumer Staples has relatively been one of the worst performing sectors since the last recession. However, recently due to the many uncertainties in the economy(US/CHINA Trade relations), staples have performed quite well (+18.1% for 2019 so far) .
Moreover, this newly found bullish strength can be observed in the Monthly breakout from the RSI/MACD divergence . The potential upside would be in the range of 65-75$ based on Wave 5 variations . There is one major structural support which is marked by the purple square( range of 48-51$) .
Key note from this technical analysis is the growing volume, which can be an indication of several factors. The most outstanding factor to me would be the recent growth in volume . This means that there is an increasing number of investors who are looking for "defensive" stocks that primarily constitute the staples sector. Obviously, this is not a good sign for the future of the economy.
This is just a brief "free" and very detailed analysis. Perhaps in the future I might form a premium group, to whose members I will provide all the details of my research.
>>I do not share my ideas for the likes or the views. This channel is only dedicated to well informed research and other noteworthy and interesting market stories.>>
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Check my Previous episodes on the US Sectors:
EPISODE 7 : US CONSUMER DISCRETIONARY( XLY) :
EPISODE 6 : US MATERIALS ( XLB ):
US Sectors Analysis : Bubble or Crash depends on what you trade!Hope this idea will inspire some of you !
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Kindly,
Phil
Long Consumer StaplesSome new bullish signals for Consumer Staples sector:
Solid Price action over SMA(20d) and SMA(50d).
SMA(20) crossed the SMA(50) the last days of the past week (Golden Cross!).
A good strategy to go long is to wait for a correction around the SM(20d).
Staples doing well, Watch out !Sector rotation is an important part of my studies and October clearly points out to a broken market structure. Consumer staples sector surperformance compare to the index (SP500) does not bold well for the market in general. Not only this sector (along with utilities) did beat the SP500 in October, it actually came out with a positive return. That could means investors are turning to defensive and rate sensitive sector to protect against a downturn in the market.
