Posted in
Newsletter
By: Tom Gentile
on July 12th, 2023
Originally published via our newsletter previously. Subscribe for early access!
Seasonal Data to Help Options Traders Post Independence Day
Hope you all had an enjoyable and safe Independence Day celebration and by safe I am talking about hoping you kept all your digits intact.
This week is a shortened week of trade because the markets were closed on the 4th of July and only had a half day of trade the day prior.
In the Tools and observations sections of this week’s newsletter I am going to show you what the SPY, the ETF that has as its goal to replicate the returns of the S&P 500 Index, has done from a performance standpoint a week and a half after Independence Day.
If you as an options trader, want to get a better idea on the potential direction for the SPY (and the S&P 500) the tool I use called Money Holidays will help retrieve that info and may help in an options traders research.
— Tom Gentile
C1P: Chief 1-Percenter
Market in Focus
Equities: XLE
The XLE is the Energy Select Sector SPDR Fund (XLE).
It is a way to use a replication strategy where one can invest or trade this ETF that consists of stocks from the following industries: oil / gas and consumable fuels / energy equipment and services. It is non-diversified.
The annotation speaks to an ‘either or’ scenario for XLE. This annotation is based on a technical view or standpoint only.
My view is not taking in to account any oil cuts from Russia or Saudi Arabia, though that news may portend a technical move off the horizontal support.
Tools and Observations for Options Traders
As promised on the front page of this weeks newsletter, I am going to show you what the SPY has done up to and including 10 days after Independence Day over the past 10 years up to 10 days after the holiday.
This table was created by and taken form my tools, (www.tomsoptiontools.com).
I typed in the symbol SPY. I did a 10-yr lookback. Chose Independence day for the Holiday. The scan type is asking the tools to search for results x number of days prior to the holiday, x days after the holiday or a combination of both time frames.
I chose ‘After’ and the number of days after I chose was 10-days (trading days).
The results show the SPY had 7 results of various # of days after the holiday where the SPY traded higher. It looks like the odds of SPY trading higher is a reasonable expectation for the SPY (equities market) and therefor I would expect the bullishness in the market prior to the holiday and that has happened for months now to continue a little bit longer.
— Tom Gentile
C1P: Chief 1-Percenter
Disclaimers
Stock and options trading has large potential rewards, but also large potential risk.
You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.
This is neither an offer to buy/sell/ or recommend a particular stock or option.
Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.
No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
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