SHY Forecast


Bullish Case: SHY's low implied volatility trajectory and mean-reverting price action suggest a stabilizing market. Expect potential price recovery as recent sell-offs may be overextended, where the historical performance data indicates a favorable long-term outlook.


Bearish Case: Elevated uncertainty in near-term volatility indicates heightened risks. Should market tensions persist and returns underperform historical averages, further declines in SHY may ensue, particularly if upcoming economic reports falter.


Potential Outcomes:

1. Price May Rebound to $85 (40% chance) - Historically stable returns.

2. Price Dips to $78 (30% chance) - Increased volatility may lead to sell-offs.

3. Sideways Trading at $81-$84 (30% chance) - Consolidation phase before a breakout.


Trading Oracle: Initiate a bullish bias using credit spreads, specifically by selling SHY 85.00 calls and buying 86.00 calls to capitalize on limited upside potential with higher implied volatility. Expect stability over the next 2-3 months, maximize profit while minimizing risk exposure.


July 25, 2024


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BOH Forecast + Options Trading Strategies   BOH  Bank of Hawaii (0.89)


JNK Forecast + Options Trading Strategies   JNK  SPDR Bloomberg Barclays High Yield Bond (0.88)


AFRM Forecast + Options Trading Strategies   AFRM  Affirm (0.87)


EXPE Forecast + Options Trading Strategies   EXPE  Expedia (0.86)


WDFC Forecast + Options Trading Strategies   WDFC  WD-40 (0.85)



Uncorrelated Assets

Assets with little price relationship to SHY



WYNN Forecast + Options Trading Strategies   WYNN  Wynn Resorts (0.0)


MSM Forecast + Options Trading Strategies   MSM  MSC Industrial Direct Co. (-0.0)


PLRX Forecast + Options Trading Strategies   PLRX  Pliant Therapeutics (-0.0)


TOST Forecast + Options Trading Strategies   TOST  Toast (-0.0)


MNRO Forecast + Options Trading Strategies   MNRO  Monro (0.0)



Anticorrelated Assets

Assets that tend to move strongly against SHY



SARK Forecast + Options Trading Strategies   SARK  Tuttle Capital Short Innovation (-0.83)


FNV Forecast + Options Trading Strategies   FNV  Franco-Nevada (-0.83)


DRV Forecast + Options Trading Strategies   DRV  Direxion Daily Real Estate Bear 3X Shares (-0.84)


SRS Forecast + Options Trading Strategies   SRS  ProShares UltraShort Real Estate (-0.84)


IMAX Forecast + Options Trading Strategies   IMAX  Imax (-0.85)





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