If the market close here, the S&P 500 would be flat compared to last weeks close. But our long XLE / short XLF strategy would return a combined more than 2% in one week. Just want to reiterate the following key points
- It is necessary to have a protection when economic outlook is not clear
- Although XLF led the snap back, it would underperform because financials' dire financial strength
- Despite a falling oil price, XLE will rise if economy recovers.