The market isn’t just volatile right now—it’s flipping sector by sector.
This wasn’t the case for most of 2024 (in fact, we had sectors go on 3-6 month runs without hardly slowing down!)… But this year? We’re seeing wild swings.
One day, Utilities, Basic Materials, and Energy get slammed while Tech and Communications rip higher. Then—48 hours later—it’s the exact opposite. And just when you think a trend is forming, it flips again.
Let’s be honest, I usually wouldn’t trade these kind of moves actively. I would wait for a real “sector rotation” to take place and focus on stocks within that sector on a month by month and quarter by quarter basis.
But right now, I am loving this volatility. And I am trading the sectors directly!
Instead of trying to call the broader market, I’ve been playing short term sector rotations—buying the most beaten-down sectors and shorting the ones that are stretched too far.
Take last week’s Energy (XLE) trade (I gave it away for free on our Friday briefing). Energy stocks had been crushed, but we spotted a snapback move. Sure enough, XLE rebounded, and today, I locked in profits.
What’s next? After closing XLE, I’m eyeing other beaten-down names for another quick-hit trade. One stock I like here is Apple (AAPL). I think it has a shot at reclaiming the midpoint of its last rally.
One of the cool “bonus” impacts of this volatility is that it’s been delivering bigger wins in our Overnight Option strategy.
We’re setting up the same trade, but getting more bang for our buck.
Just like we did this week on the back of the weekend drop and then the Jobs report which I predicted,
You can see the run we have been on:
If you’re not taking advantage of this strategy, you can watch my full presentation on it here.
And maybe I will see you for today’s trade!
— Nate Tucci
