FEP Forecast


Bullish Case: FEP’s historical price data indicate strong positive returns over holding periods, especially beyond one year, suggesting investor confidence. Implied volatility trends show robust potential for upside as market sentiment builds ahead of significant European political events, likely favoring growth.


Bearish Case: Current volatility levels indicate market uncertainty surrounding economic conditions, with potential downward pressure from geopolitical tensions and upcoming elections. This could lead to a decline in investor confidence, impacting FEP’s price trajectory negatively.


Potential Outcomes:

1. 40% chance of +10% returns due to bullish trends and positive market sentiment.

2. 30% chance of -10% returns given high volatility and macroeconomic pressures.

3. 30% chance of neutral performance as market stabilizes.


Trading Oracle: Engage in a debit spread strategy, buying the FEP 39.00 call while selling the 40.00 call for the September 2024 expiry. This bullish play capitalizes on potential upside while limiting risk, leveraging current volatility conditions for high reward with manageable risk.


July 25, 2024


First Trust Exchange-Traded Fund III - First Trust Europe AlphaDEX Forecast

FEP      First Trust Exchange-Traded Fund III - First Trust Europe AlphaDEX











Correlated Assets

Assets that tend to move strongly with FEP



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.95)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.48)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.64)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.67)



Uncorrelated Assets

Assets with little price relationship to FEP



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.48)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.64)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.67)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.95)



Anticorrelated Assets

Assets that tend to move strongly against FEP



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.95)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.48)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.64)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.67)





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