XLF Forecast + Trading Strategies



Bearish<—>Bullish



80% Confidence




Bullish Case: XLF's historical trends and a 10.1% monthly gain argue for potential upside, complemented by cooling market volatility and strong financial sector fundamentals.




Bearish Case: High implied volatility and low trading volume signal potential risk. Economic uncertainties and recent flat price action at -1.8% over the past 90 days could pressure XLF downward.




Potential Outcomes:
  • Upside continuation: 40% chance based on historical gains.
  • Stabilization: 30% chance given current volatility levels.
  • Downward drift: 30% chance from high market uncertainty.




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May 21, 2025


Financial Select Sector SPDR Forecast

XLF        Financial Select Sector SPDR











Correlated Assets

Assets that tend to move strongly with XLF



BK Forecast + Options Trading Strategies   BK  Bank Of New York Mellon (0.97)


JPM Forecast + Options Trading Strategies   JPM  JPMorgan Chase (0.96)


NDAQ Forecast + Options Trading Strategies   NDAQ  Nasdaq (0.96)


RCL Forecast + Options Trading Strategies   RCL  Royal Caribbean (0.95)


BAM Forecast + Options Trading Strategies   BAM  Brookfield Asset (0.94)



Uncorrelated Assets

Assets with little price relationship to XLF



ETR Forecast + Options Trading Strategies   ETR  Entergy (-0.01)


HAS Forecast + Options Trading Strategies   HAS  Hasbro (0.01)


VTRS Forecast + Options Trading Strategies   VTRS  Viatris (0.01)


FE Forecast + Options Trading Strategies   FE  Firstenergy (0.02)


RYAAY Forecast + Options Trading Strategies   RYAAY  Ryanair (0.02)



Anticorrelated Assets

Assets that tend to move strongly against XLF



TDW Forecast + Options Trading Strategies   TDW  Tidewater Inc. - New (-0.78)


STNG Forecast + Options Trading Strategies   STNG  Scorpio Tankers (-0.78)


OXY Forecast + Options Trading Strategies   OXY  Occidental Petroleum (-0.78)


PAGS Forecast + Options Trading Strategies   PAGS  PagSeguro Digital (-0.79)


STM Forecast + Options Trading Strategies   STM  New York Shares (-0.8)









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