The Financial Select Sector SPDR Fund (XLF) has run away like a freight train since Trump’s election, but we did see some cheap protection buyers yesterday, utilizing the January 20 puts in the product. XLF has traded as high as $23.07 this morning before regressing a bit and we have mentioned the presence of call buyers and inflows in the product on several occasions in this recap recently.
The XLF was up once again Tuesday afternoon, trading at $23.06, up $0.14 (+0.61%).
In other action, a new upside strike in the SPDR S&P 500 ETF Trust (SPY) options traded yesterday: the January 230 calls. This is a reflection of where markets currently are, after the post-Trump election rally, and where market expectations into 2017 may perhaps be.
This morning, SPY is trading with a $221 handle (up 0.17%), and this trade may be speculation on a “Santa Claus” rally in equities that may follow through into January of next year. Market technician David Chojnacki notes upside resistance in the SPX at 2212 and 2213, and we’ve seen trades as high as 2214.10 briefly five sessions ago. Thus, traders and investors can expect some potential trouble crossing that level in the near term.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.