XLB Forecast + Trading Strategies


Bullish Case: A potential recovery in demand for materials could drive prices higher, supported by XLB's relatively high bullish momentum in options trading and flat implied volatility across the term structure, suggesting stability.




Bearish Case: Material sector weaknesses exacerbated by economic data could result in downward price pressure. High historical price stagnation indicates risk, as bearish sentiment outweighs bullish interest in options market.




Potential Outcomes:

1. Price increases to $98 (30% chance).

2. Price remains flat around $94 (40% chance).

3. Price declines to $90 (30% chance). Economic data post-election could sway volatility and market sentiment significantly.




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October 27, 2024


Active Trust - Materials Select Sector SPDR Forecast

XLB        Active Trust - Materials Select Sector SPDR











Correlated Assets

Assets that tend to move strongly with XLB



EWG Forecast + Options Trading Strategies   EWG  BlackRock Institutional Trust Company N.A. - iShares MSCI Germany (0.94)


EWC Forecast + Options Trading Strategies   EWC  BlackRock Institutional Trust Company N.A. - iShares MSCI Canada (0.94)


PNR Forecast + Options Trading Strategies   PNR  Pentair (0.94)


TOL Forecast + Options Trading Strategies   TOL  Toll Brothers (0.94)


VEA Forecast + Options Trading Strategies   VEA  Vanguard FTSE Developed Markets (0.93)



Uncorrelated Assets

Assets with little price relationship to XLB



LVS Forecast + Options Trading Strategies   LVS  Las Vegas Sands (-0.0)


SONO Forecast + Options Trading Strategies   SONO  Sonos (-0.0)


UNIT Forecast + Options Trading Strategies   UNIT  Uniti (0.01)


GLBE Forecast + Options Trading Strategies   GLBE  Global E Online (0.01)


UCO Forecast + Options Trading Strategies   UCO  ProShares Ultra Bloomberg Crude Oil (-0.01)



Anticorrelated Assets

Assets that tend to move strongly against XLB



HUM Forecast + Options Trading Strategies   HUM  Humana (-0.78)


SAVE Forecast + Options Trading Strategies   SAVE  Spirit Airlines (-0.78)


BA Forecast + Options Trading Strategies   BA  Boeing (-0.79)


SQQQ Forecast + Options Trading Strategies   SQQQ  ProShares UltraPro Short QQQ (-0.81)


SPXS Forecast + Options Trading Strategies   SPXS  Direxion Daily S&P 500 Bear 3X Shares (-0.85)









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