XLE Forecast + Trading Strategies


Bullish Case: A resurgence in oil prices driven by geopolitical tensions and increasing demand from emerging markets could propel XLE above $100, supported by bullish market sentiment and lower implied volatility.


Bearish Case: An increase in US energy production or a global economic slowdown could push XLE below $85, as persistent oversupply and weakened consumer demand dampen prices. Short-term volatility spikes signal potential instability.


Potential Outcomes:

1. XLE rises above $100 (30%); driven by geopolitical tensions.

2. XLE declines to $85 (40%); oversupply from US increases.

3. Flat trading around $90 (30%); neutral signals from market data.


Trading Oracle: Consider implementing a bullish debit spread on XLE, buying the $92 call and selling the $95 call expiring in 30 days. Current volatility is favorable, and historical trends suggest a high probability of profit with a strong risk/reward ratio.


July 25, 2024


Energy Select Sector SPDR Forecast

XLE      Energy Select Sector SPDR











Correlated Assets

Assets that tend to move strongly with XLE



VDE Forecast + Options Trading Strategies   VDE  Vanguard Group, Inc. - Vanguard Energy (1.0)


ERX Forecast + Options Trading Strategies   ERX  Direxion Daily Energy Bull 2X Shares (0.98)


XOP Forecast + Options Trading Strategies   XOP  SPDR Oil & Gas Exploration and Production (0.95)


SM Forecast + Options Trading Strategies   SM  SM Energy (0.88)


OVV Forecast + Options Trading Strategies   OVV  Ovintiv (0.86)



Uncorrelated Assets

Assets with little price relationship to XLE



WEC Forecast + Options Trading Strategies   WEC  WEC Energy (-0.0)


SSD Forecast + Options Trading Strategies   SSD  Simpson Manufacturing Co. (-0.0)


BUG Forecast + Options Trading Strategies   BUG  Global X Cybersecurity (-0.0)


MESO Forecast + Options Trading Strategies   MESO  Mesoblast (0.0)


ABEO Forecast + Options Trading Strategies   ABEO  Abeona Therapeutics (-0.0)



Anticorrelated Assets

Assets that tend to move strongly against XLE



IGV Forecast + Options Trading Strategies   IGV  BlackRock Institutional Trust Company N.A. - iShares Expanded Tech-Software Sector (-0.8)


SCO Forecast + Options Trading Strategies   SCO  ProShares UltraShort Bloomberg Crude Oil (-0.83)


SOXX Forecast + Options Trading Strategies   SOXX  BTC iShares PHLX Semicond (-0.83)


CNXC Forecast + Options Trading Strategies   CNXC  Concentrix (-0.85)


ERY Forecast + Options Trading Strategies   ERY  Direxion Daily Energy Bear 2X Shares (-0.98)





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