XLC Forecast


Bullish Case: Implied volatility backwardation suggests near-term uncertainty. XLC historical returns show a significant likelihood of positive returns over 1-2 year periods.


Bearish Case: Flat recent price action and backwardation in implied volatility structure indicate cautious market sentiment. High short-term options volatility hints at potential near-term downside.


Potential Outcomes:

1. Continued flat price action (40%)

2. Gradual increase with volatility decrease (30%)

3. Sudden downside due to high near-term implied volatility (30%)


Trading Oracle: Bearish short-term outlook due to elevated near-term IV and flat price action. Enter a short volatility credit spread (July 2024). Trade cautiously with a 30-day outlook. Debit spreads on weekly options near current prices ($85.66) can capitalize on IV contraction and mitigate risks.


June 28, 2024


Active Trust - Communication Services Select Sector SPDR Forecast

XLC      Active Trust - Communication Services Select Sector SPDR











Correlated Assets

Assets that tend to move strongly with XLC



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.89)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.4)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.73)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.76)



Uncorrelated Assets

Assets with little price relationship to XLC



XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.4)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.73)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.76)


ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.89)



Anticorrelated Assets

Assets that tend to move strongly against XLC



ETRN Forecast + Options Trading Strategies   ETRN  Equitrans Midstream (0.89)


XLE Forecast + Options Trading Strategies   XLE  Energy Select Sector SPDR (0.4)


VFC Forecast + Options Trading Strategies   VFC  VF (-0.73)


LI Forecast + Options Trading Strategies   LI  Li Auto (-0.76)





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