XLY Forecast


Bullish Case: XLY's historical showing robust price return potential, and current bullish risk bias makes a compelling case for upside. The backwardation term structure supports short-term bullish sentiment.


Bearish Case: Implied volatility surface suggests heightened uncertainty; a potential economic downturn or consumer sentiment decline could severely impact XLY prices amid a bearish scenario.


Potential Outcomes:

1. Continued uptrend (45%): Sustained consumer confidence and economic stability.

2. Short-term pullback (35%): Market volatility or economic headwinds.

3. Major downturn (20%): Recession or significant consumer sentiment decline. Estimated probabilities refined from historical data and implied volatility.


Trading Oracle: Initiate a bull put credit spread expiring October 2024 at $190/$180 strikes. Aim to capitalize on low short-term volatility and expect stable or moderately bullish price action. High reward-risk ratio with a robust positive edge, ensuring strong probability-of-profit.


July 16, 2024


Active Trust - Consumer Discretionary Select Sector SPDR Forecast

XLY      Active Trust - Consumer Discretionary Select Sector SPDR











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