Geopolitical Issues Impact on Key Markets
$TLT $XLE
Wrote about both of these last week, but the events of this past weekend bring their price movement even more into focus.
If you were looking for a catalyst for a reversal in treasuries, war certainly is one. My lean is that the TLT 0.00%↑ makes the move up to at least the 20 day, if not to the October ‘22 low at $91.85. Risk/reward using Friday’s low is favorable, and I expect we’ll know quickly whether this call is right or wrong.
I’m less constructive on the today’s bounce in the XLE 0.00%↑ (recall the heavy XOM 0.00%↑ and CVX 0.00%↑ concentration). I’m on the sidelines with XLE 0.00%↑ below $95. If I had more conviction I’d short given the test and fail of the 20 day (at least thus far in the day), but it’s not a trade I find particularly attractive given the headlines.
