After a steep decline in $XLE/
GLD
, the chart has now formed the highlighted cup & handle.
Combine this with the observation that CPI YoY & Core PCE YoY ( USCCPI ) are in strong declining trends, which historically correlates negatively with oil (and oil-related equities) and positively with gold.
Executing on this idea: use a lower-vega strategy:
Combine this with the observation that CPI YoY & Core PCE YoY ( USCCPI ) are in strong declining trends, which historically correlates negatively with oil (and oil-related equities) and positively with gold.
Executing on this idea: use a lower-vega strategy:
Kommentar:
(**Why low vega**: VIX seems to be suppressed at this time, which means that even if the price performs to target, your options strategy might severely underperform b/c the expected IVOL bump fails to materialize.)
Kommentar:
I'm closing out this trade b/c oil crossed my stops.