We can’t overstay the long side on trades with the SPY up 10 or 11 months. However, anomalous moves on shorter time frames in the last couple years, have NOT created the mean reversion that we have seen in past years. So it’s a reason to be aware, not a reason to be bearish. I do think higher prices, but I only want to buy dips and the SPY is darn close to all time highs…. so for me too close to be buying. I’ll await some consolidation leading into the election, if we are fortunate enough to see it.
As I spoke to on the weekend, I added XOM 120 calls at $3.50 for the end of November. Will probably sell some shorter term out of the money calls against this position if we rally this week. I like CVX and XOM. The attached chart of Exxon Mobil shows a classic flag pattern consolidation on the daily chart attached. Also have a look at the weekly chart which appears to be building for what could be a BIG breakout to the upside.
My TLT bond ETF is struggling. I had thought 94 would hold. It closed just above 92. However, to my benefit I have set up spreads with the long dated into June and September of 2025 , so there is plenty of time to play defense selling short dated calls against these positions. The oil stocks and the bond ETF are my only positions right now.
Thanks,
Joe
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