XLE, XOP, and USO have provided some nice profits for me in recent weeks. But even with the market strength, these markets are signaling distribution. Is this a shorting opportunity? NO. It’s an exit opportunity. I’m out of energy and moving to a very low Delta portfolio.
Low Delta and negative Vega is actually a method for respecting a bullish market that is a little extended.
I added a calendar to RUT profile in case IV spikes.
I’ve seen some recently trying to sell puts on VXX — what a bad plan for getting long Volatility! VXX is mathematically the worst instrument on earth to get long while it’s trending down… THE WORST.
I like VIX calls and Index calendars much better for long Vega protection.
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