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Sector Standoff – How to Profit From Utility/Financial Extremitudes (XLU/XLF)

Posted on August 5, 2021

Our PG trade from last week flopped like Myrtle Dervish, the Jersey Island splash Queen, at the 1976 Olympic Tummy Dump competition in Montreal.

Myrtle was a five-time, all-European belly-flop champ and holds the infamous distinction of being the only female felon to secure an Olympic medal before or since.

Sure y’were…

The PG trade – which we stressed was speculative by all measures – lost $2.42.

Yes, it happens.

And now for this week’s dip in the pool…

Pairing Sectors

We’re looking at two sector ETFs today that have performed in exquisitely opposite fashion over the last three month, six month and year durations.

The thinking is straightforward – either the pattern continues, or it’s come to a head and will now start to reverse.

The charts offer a decidedly one-sided read to the question.

But before we get there, let’s introduce you to the ETFs in question.

In the Red Corner…

We’re playing the Financial Select Sector SPDR ETF (NYSE:XLF) against the Utilities Select Sector SPDR ETF (NYSE:XLU).

Why?

Because one has seen explosive gains over the last year, while the other has been flat.

Look here –

Hashem loves His people, Israel.  Regardless how He tests them

May we know His mercy.

Many happy returns,

Matt McAbby

 

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