Nowhere to hide in the Equity Markets this week. Large Caps, Small Caps, Domestic, International, Etc… All down hard.
Looks like I was early to my Energy play – will probably be put 1000 shares of XLE at $55 per share tomorrow when the options expire. XLE was last trading at $53.66 – so that would represent a small loss even with the $1,000 premium I was paid to sell the options. With Oil at $30.00 per Barrel – I hope I am buying in close to the bottom – will need patience with this trade, but see some real long term upside. Even though I wanted more equity exposure (following my Rebalancing Portfolio Rules), this trade highlights the danger of trading against the trend – and trying to call a bottom.
The following chart is based on the Z Option Market Analysis Tool – which determines if a market is trending by assigning a trending score from -3 to +3. This helps us keep our trading with the trend.
| Symbol | Description | Short Term Trend | Medium Term Trend |
| $DJI | Dow Jones Industrial Average | -3 | -3 |
| SPX | S&P 500 INDEX | -3 | -3 |
| RUT | RUSSELL 2000 INDEX | -3 | -3 |
| NDX | NASDAQ-100 INDEX INDEX | -3 | -3 |
| VIX | CBOE MARKET VOLATILITY INDEX | 3 | 3 |
| /ZB[H6] | 30-Year U.S. Treasury Bond Futures,ETH | 3 | 3 |
| /ZN[H6] | 10-Year U.S. Treasury Note Futures,ETH | 1 | 3 |
| /GC[G6] | Gold Futures, ETH | 1 | -1 |
| /CL[G6] | Light Sweet Crude Oil Futures,ETH | -3 | -3 |
| /DX[H6] | US Dollar Index Futures | 3 | 3 |
| $DJT | Dow Jones Transportation Average | -3 | -3 |
| XLK | SELECT SECTOR SPDR TRUST TECHNOLOGY SELECT INDEX | -3 | -3 |
| XLI | SELECT SECTOR SPDR TRUST INDUSTRIAL SELECT INDEX | -3 | -3 |
| XLY | SELECT SECTOR SPDR TRUST CONSUMER DIS SELECT INDEX | -3 | -3 |
| XLB | SELECT SECTOR SPDR TRUST MATERIALS SELECT SEC INDEX | -3 | -3 |
| XLE | SELECT SECTOR SPDR TRUST ENERGY SELECT INDEX | -3 | -3 |
| XLP | SELECT SECTOR SPDR TRUST CONSUMER STAPLES INDEX | -3 | -2 |
| XLV | SELECT SECTOR SPDR TRUST HEALTH CARE SELECT INDEX | -3 | -3 |
| XLU | SELECT SECTOR SPDR TRUST UTILITIES SELECT INDEX | -2 | 1 |
| XLF | SELECT SECTOR SPDR TRUST FINANCIAL SELECT SECTOR FUND | -3 | -3 |
Any market showing a 3 or a -3 is trending strongly – and should be factored into any options strategy you are contemplating.
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