A lot of you guys and gals trade LABU and/or XLE. My bias is
that SPX will be down significantly in a month. I thought energy
stocks would be headed up for multiple reasons. LABU has dropped an
awful lot and may be just following SPX down. I may just have to
close my eyes and sell ( those two are considerably in the red).
Any thoughts/ speculations/ sober analysis appreciated l, either
way!
Posted by DigiNomad on 16th of Sep 2022 at 02:58 pm
My experience is that trading XLE is a pain in the ass. The
problem really is, and I'm not being political, the ESG pressure on
the sector. ESG influence is the only thing that explains a single
digit PE multiple in a sector with solid fundamentals and
growth. I don't think this is an opinion - it's a fact. As a
result, you can't rely on your fundamental analysis of the supply
demand situation. For that reason, you are pretty much stuck
trading level to level and that makes the entry critical because
you can't rely on fundamentals to eventually bail you out if you
entered at a short term high. I still trade it, but the nature of
it has forced me to only take short term positions...mostly when
oversold. Even when I follow my entry rules, I still end up being
wrong a lot in the energy sector.
*Because ESG aggregates so many funds these days and has so
much buying power, it is probably appropriate to have a "Don't
fight ESG" saying right along side of "Don't fight the
Fed."
LABU and XLE near support.
Posted by mdgfain on 16th of Sep 2022 at 01:25 pm
LABU and XLE near support. Bounce or break?
A lot of you guys
Posted by mdgfain on 16th of Sep 2022 at 02:33 pm
A lot of you guys and gals trade LABU and/or XLE. My bias is that SPX will be down significantly in a month. I thought energy stocks would be headed up for multiple reasons. LABU has dropped an awful lot and may be just following SPX down. I may just have to close my eyes and sell ( those two are considerably in the red). Any thoughts/ speculations/ sober analysis appreciated l, either way!
My experience is that trading
Posted by DigiNomad on 16th of Sep 2022 at 02:58 pm
My experience is that trading XLE is a pain in the ass. The problem really is, and I'm not being political, the ESG pressure on the sector. ESG influence is the only thing that explains a single digit PE multiple in a sector with solid fundamentals and growth. I don't think this is an opinion - it's a fact. As a result, you can't rely on your fundamental analysis of the supply demand situation. For that reason, you are pretty much stuck trading level to level and that makes the entry critical because you can't rely on fundamentals to eventually bail you out if you entered at a short term high. I still trade it, but the nature of it has forced me to only take short term positions...mostly when oversold. Even when I follow my entry rules, I still end up being wrong a lot in the energy sector.
*Because ESG aggregates so many funds these days and has so much buying power, it is probably appropriate to have a "Don't fight ESG" saying right along side of "Don't fight the Fed."
Thank you, DigiNomad, for the
Posted by mdgfain on 16th of Sep 2022 at 03:04 pm
Thank you, DigiNomad, for the benefit of your experience.