XLP/SPYXLP relative to SPY flirting with a breakout here. Staples are not what you want to see leading if you're looking for a bull market in equities.
XLP trade ideas
Crash Incoming 6? (Update 3)Hi again:
Here is, with some examples (scroll the chart to the left), how the strategy works and how you can avoid crashes and even small downturns in the market.
On top (dark yellow line) the S&P500, 1D timeframe. The chart below is the XLP/SPX using two moving averages: blue line is the 1 EMA and the pink line a 155 EMA.
When the XLP/SPX crosses up the 155 EMA line, it's time to sell the S&P 500 (basically, almost all your stocks, because nowadays almost all move in synchrony) and vice versa.
Of course, there are multiple strategies you can use and even in a downtrend you can sell only some of your stocks, even buy in very small amounts shares or fractional shares (DCA). You can also adjust the parameters changing the timeframe and the EMA for swing trade or for long-term investing.
That's it. Good luck, patience and don't forget, make it simple.
Crash Incoming 6? (Update 2) CONCLUSION Hi again.
There is too much noise out there: a lot of controversial news, information and counter information, 'beautiful' slogans like 'bad news, are good news' and vice versa, or, as an example, good, and not so good, ideas in the 'giant' Internet. For me, a rational approach was necessary.
Since March 2022, with simple charts and no bias ideas, I am studying the possibility of a big crash. Since then, the market has corrected strongly and, recently, we had a nice run.
I don't know if we will see "the mother of all crashes" in the next months, what I know is that we want to make money and, for that, the only think you need to know is following the trend. The best you can do to beat the market is to invest or trade the S&P 500 or the Nasdaq (or maybe the 5-10 big companies of these indexes) following this idea and forget about news, earnings, reports, gurus courses, or pre and after markets of individual companies 20% moves. I know it's not easy, there are a lot of distractions and greed is our major enemy; we want to invest in everything, right?
In this update, I conclude, for now, that the best chart to predict the 'health' of the market (not the economy, of course), and stop the noise, is XLP/SPX.
I hope that this 'crash' serie is helping you to protect your portfolio, nevertheless, we need to take action and not to invest with a 'crash bias'. Here we have the monthly chart, it's very clear that when the trend is up, the S&P will go down and vice versa. I don't need to use more words to explain it and I advise you to find a simple strategy and stop following so many people or other 'distractions'.
As an example, I will ad an image to this update with another timeframe and an EMA, of course you can choose your timeframe and EMA to identify the trend and swing trade accordingly.
Stay well.
XLP: Hit a strong support lineXLP hit a level that has served as a strong support line since November 2020. Not sure if it will hold this time, but getting pretty oversold here. Costco also beat earnings, I'll play the 10/14 $69.5c. Not expecting much but hopefully a small bounce before more downside. GL
Defensives will go sidewaysConsumer defensive sector is overcrowded due to recession agenda. But the truth is - it's not really going anywhere. Until the recession fears vanish - then it goes down. Not the hedge you like
consumers starting to spend less money againin times where this is above 2 consumer defensive is winning out, and in times where this is below 2 consumers are spending more money and buying consumer discretionary goos/services. recently this chart peaked, and now weve retraced and it is reversing again. probably going to set a lower weekly high, but qqe is long and sss is green so the defensive funds are probably the best bet in terms of consumer goods.
XLP/SPY indicates probability for a move to the upside higherIdea is based on the XLP/SPY chart using the inverted relationship between them. Since we have just made a strong move to the upside in XLP/SPY during the latest bear market, price has extended well above the 50 MA, a retracement towards it is warranted and leads to the SPY moving higher historically. The probability for a move to the upside at least in the short term is therefore higher! If we drop below the 50 MA and close back above it on the weekly chart, that would be an excellent place to short the SPY again! However, if we break below it and continue to the downside, then expect continuation to all time high.
Is this a diamond top?Hey hey everyone,
Trying to improve my chart reading. Any input is appreciated. Looks like a diamond top, but what do you say?
Crash Incoming 6? (Update)
A more precise approach of this chart:
After reaching the white line, now support, there is a possibility that XLP/SPX will go, at least, towards the yellow line. But maybe only the red resistance line will be the next strong inflection point for the S&P 500. With these possibilities in mind to manage my short positions, I will wait to long any asset, except for TLT; based on my "Crash Incoming 11?" idea, after consolidation, it could start its way up in the following weeks (nevertheless, as always, it will be a very cautious buy).
Recently, BTC (crypto) started a strong pullback and, generally, at least in the last months, this market anticipates the traditional markets moves.
Stay well...
Crash Incoming 6?Usually Consumer Staples, a risk-off sector, has an inverse correlation with the S&P500 . In this chart, strong uptrends in the XLP / SPX (blue line) coincides with S&P500 (green line) corrections or crashes (circles). There is a possibility that the bottom of the XLP / SPX was the below white line in the chart, while the top one, a historically strong support/resistance , could have a significant role in the following weeks or months. If this white line is broken in the future, it could mean, in the worst case scenario, the confirmation of a bear market or a crash.
Again, lines in the sand, nevertheless, I believe this are times to be extra careful.
(This idea was developed based on a Game of Trades analysis).
A potential bull trap is in the making in the SPYHi, this idea is based on the analysis of XLP/SPY vs the SP500 for the last 2 bear markets. All information is on the chart.
The Consumer Stables sector $XLP is looking bullish!* Breaking out of an inverse head and shoulders pattern
* Measured objective for the pattern is around the all-time-highs
You can trade the ETF itself or find buying opportunities in individual stocks in this sector.
DYDD before buying anything and always manage your risk!
Healthcare is bouncing bigHealthcare seems to be finally reversing with lot of momentum compared to other sectors as was expected in this high inflation environment.
June 16th tested the lows made on May 24th and this bear market seems to be bouncing back up for a correction from recent lows.
It’s quite possible healthcare sector ends up positive from here thru the year end while the rest of the sectors struggle.
XLP PutConsolidating after a a big move down the day before. High put options volume. Looking for another move down
The rotation out of defensive stocks?While the markets were red across the board the defensive stocks XLP ( consumer staples ) had the worst day which looks like it could be the start of a sector rotation back into growth. As you can see every time the market is crashing correcting or having turbulence XLP outperforms SPY. We were in a large counter trend rally during this correction which looks to be reversing now which could be marking the low for the S&P500.
GUESS WHAT HAPPENS WHEN THE FED TIGHTENS CREDITAMZN, The poster child for Discretionary Spending is already showing cracks in it's armor!
But what will happen when the FED gets rolling?
Stay tuned...
Defensives need a strong pullbackConsumer staples seem to be strongly overbought, the downturn is obvious, this will help other sectors in terms of money flows rotation. No good buys in sector, everything is overvalued - tells you something, doesn't it
Will Consumer Staples Continue to Outperform Tech?Investors preference between XLP and QQQ is important to pay attention to as it shows the trade-off of "risk off equities" (XLP) versus "Risk on equities" (QQQ). The last time XLP was at these levels relative to Tech was in 1999!
The chart above shows XLP/QQQ. As you can see, XLP outperforms heavily during larger degree market corrections. Since December 2021 Staples have been on a tear due to inflation and the Invasion of Ukraine. Investors are clearly spooked. Instead of investing in speculative tech stocks, they are looking towards investing in markets that have stable demand. Staples are the essential products used by consumers.
If there is to be a bigger market drawdown, we will need to see stronger outperformance by XLP. Weakness in XLP is definitely a bullish sign for markets.
The Orange Lines show periods where XLP outperformed QQQ.
The Blue Lines represent Bullish target areas for XLP.
XLP bearish till 66XLP bearish till 66
Pitchfork headed to new bearish downleg.
Stay tuned for further sellers
Inflation higher than expected and global trade slowdown due to secondary sanctions will cooloff this ETF
XLP 73/70 Mar 18 Put Credit SpreadThis idea is a little out of the norm for me. I generally stick to broad market, but from time to time I play sectors.
Credit Received: 0.36 or $36 / contract
Strikes: Short 73 Long 70
Max Loss: 300-36 = $264 per contract
Short Leg Delta: 30 Delta (more on this below)
Trade Reasoning:
1. Market is being beat up by both the Ukraine - Russia situation and inflation, if both continue to worsen I believe consumer staples (what XLP tracks) will outperform the rest of the market.
2. White line presents a possible support level above my short strike here - Check!
3. Renko Overlay indicator from www.tradingview.com is a new addition to my chart, and it showed another decent support level (see picture below), this is represented by the yellow dashed line.
12% Return on risk - Less than 30 DTE - TP at 50% - SL at -200%
Notes:
1. Delta is almost 2x what I normally shoot for (16 delta normal short target), however with these sector ETFs there is often wide spreads, little volume and somewhat crappy IV as well. As such, beggars can't be choosers.
2. Average True Range - ATR on this thing is piddly, so I felt more comfortable going closer to the money here.
3. Renko has been something that I have played with in the past, but I found it left out TOO much info. As such this overlay option from /u/LonesomeTheBlue is a very welcome addition.
sectors s&p sectors s&p ..................... how related sectors in the future will be affected by the inertes rate cute
Defensives to winLate cycle allocations are at peak. Now its time for defensives. They overperformed the index in January, will keep benefiting from cycle rotation
XLPDaily Chart Report
XLP looks like it is forming a bull flag. If it breaks out to the upside then the first price target would be the ATH resistance level. If it breaks down then you will find support around the 73 level. If you see the indicator below the two lines are compressing. A compression always leads to an expansion. A big move is in the cards next week. I also want to note that XLP is a defensive sector so it tends to outperform in a choppy market.
