XLE Forecast + Trading Strategies



Bearish<—>Bullish



80% Confidence




Bullish Case: XLE may rise due to geopolitical tensions increasing oil prices and energy demand. Implied volatility is low, indicating potential for upward price moves.




Bearish Case: XLE could decline further as oversupply and economic slowdown fears persist. The term structure's flatness suggests prolonged bearish sentiment.




Potential Outcomes:
  • Flat trading, 60% chance due to mixed signals and stable implied volatility.
  • Potential drop of 5%, 25% chance, driven by oversupply concerns.
  • 5% rise, 15% chance, fueled by geopolitical tensions.




Trading Oracle: Implement Bullish Short Volatility strategy: Selling ATM puts caps downside in flat markets, buying OOTM puts for hedging. XLE's low volatility and neutral forecast favor this setup.



May 01, 2025


Energy Select Sector SPDR Forecast

XLE        Energy Select Sector SPDR











Correlated Assets

Assets that tend to move strongly with XLE



CVX Forecast + Options Trading Strategies   CVX  Chevron (0.86)


HES Forecast + Options Trading Strategies   HES  Hess (0.82)


OVV Forecast + Options Trading Strategies   OVV  Ovintiv (0.8)


CHX Forecast + Options Trading Strategies   CHX  ChampionX (0.71)


STLD Forecast + Options Trading Strategies   STLD  Steel Dynamics (0.71)



Uncorrelated Assets

Assets with little price relationship to XLE



HL Forecast + Options Trading Strategies   HL  Hecla Mining (-0.0)


ITB Forecast + Options Trading Strategies   ITB  BTC iShares U.S. Home Construction (0.0)


MAIN Forecast + Options Trading Strategies   MAIN  Main Street (-0.0)


MIR Forecast + Options Trading Strategies   MIR  Mirion Technologies Inc. (-0.0)


SG Forecast + Options Trading Strategies   SG  Sweetgreen (-0.0)



Anticorrelated Assets

Assets that tend to move strongly against XLE



UL Forecast + Options Trading Strategies   UL  Unilever (-0.46)


FCEL Forecast + Options Trading Strategies   FCEL  Fuelcell Energy (-0.46)


SCO Forecast + Options Trading Strategies   SCO  ProShares UltraShort Bloomberg Crude Oil (-0.48)


VIXY Forecast + Options Trading Strategies   VIXY  ProShares VIX Short-Term Futures (-0.49)


VXX Forecast + Options Trading Strategies   VXX  iPath Series B S&P 500 VIX Short-Term Futures (-0.49)









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