Oil/Gold Short Setup: Inverted Cup & Handle (XLE/GLD)

After a steep decline in $XLE/, 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:

Low (2x max) leverage
Short XLE: directly short sell the shares, or buy inverse ETF (DUG, ERY).
Long GLD: Just buy GLD, or go 2x with $UGL. Make sure that it balances your XLE short after accounting for leverage.

Note

(**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.)

Note

I'm closing out this trade b/c oil crossed my stops.

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