14 Minute Read

Friday Feature – Women in Trading: Back to school or not?

August 28, 2020

By | No Comments

Hey Tackle Traders,

Around this of time year, I like most families would be taking advantage of the last days of summer by hitting the amusement parks, taking one last trip to the beach or local pools then shut it down with a family cookout or gathering of some sort. Dreading every moment of the cold days ahead, the ultimate tell-tale sign of summer coming to an end flashes on your TV screen; Back to school commercials! If you are a parent with school-age kids you’d find yourself at the stores buying clothing and the never-ending school supplies list. This year things are a bit different for a lot of parents as the majority of the school districts decided to start the school year with virtual learning and keep the kids at home. I know I’m not on an island by myself when it comes to wanting to make money from the companies you spend money on especially when that spending is going to set you back a few pennies. In the past during back to school season knowing that every consumer myself included would be flocking to the stores to buy small and big-ticket items for their kids, I’ve had my eye on certain retail stocks and ETF’s for a potential play. The question this season is the drive to make such purchases happening or is back to school shopping no longer a thing? With the pandemic still looming and millions unemployed should I write off a play at the retail sector play this year or not?

Let us explore and see what we discover. Now when we’re talking consumer spending we can list a bunch of companies a mile long consumers are likely to spend their dollar so let’s keep it simple and look at ETFs rather than individual companies. The two I have in mind or XLP and XLY but I’m going to throw in XRT. These EFT’s holdings have companies you will recognize and likely to have used their products or services. Below are a quick description and list of their top holdings. You can find a list of all their holding on many online platforms or in TOS under fundamentals which is in the analyze tab. 

The Consumer Staples Select Sector SPDR invests in companies that are primarily involved in the development and production of consumer products that cover food and drug retailing, beverages, food products, tobacco, household products, and personal products. There are 33 companies in the Consumer Staples Select Sector SPDR.

The Consumer Discretionary Select Sector SPDR invests in industries such as automobiles and components, consumer durables, apparel, hotels, restaurants, leisure, media, and retailing. There are 61 companies in the Consumer Discretionary Select Sector SPDR

This ETF offers exposure to the U.S. retail industry, a targeted sub-sector of the consumer discretionary space that may have appeal for investors looking to bet on increased consumer consumption in the domestic market. There are 82 companies in XRT. 12 in Consumer Staples and 70 in Consumer Discretionary.

Now that we have a general idea of what these ETFs hold, the next step is to look at the charts and determine your market posture of whether they are bullish, bearish, or neutral.

Well looking at these three charts, the one thing they all have in common is that they hit their all-time highs this week. Next is to rank your bias. If your bias is bullish, well how bullish are you? We categorize our bias a +1 mildly bullish, +2 moderately bullish, and +3 aggressively bullish. Once you have ranked your bias, it makes it easier to determine a trading strategy. Example:

  • Mildly Bullish (1): Covered Call, Short Put, Bull Put
  • Moderately Bullish (2): Bull Call
  • Aggressively Bullish (3): Long Call

After that, it’s all about waiting for the technical set up for entry. Position size accordingly, set your stop loss and profit-taking targets, and boom you are all set.

So I guess the argument can be made that even though the majority of consumers didn’t flock the stores to buy pencils, crayons and that first day of school outfit, people are spending money on other things such as electronics and items needed for these new learning environments for kids and investors have been eating up “the stay at home stocks” of the market with companies like AMZN, PG, HD, WMT, COST, DG among them, it’s no surprise that the ETF’s holding such companies will do well. 

Ladies join me tonight as we will continue this discussion in the Women In Trading Webinar at 8:30 pm est.

https://tackletrading.com/events/

Until next time Traders!

Coach Em


Emily Muiruri

Emily Muiruri

Emily Muiruri was born and raised in Nairobi, Kenya before her family moved to the US and settled in Maryland, Emily began her trading journey in January 2015 after 17 years of Property Management in the Self-Storage Industry. Like many new traders, Emily started off with directional trading strategies such as long calls, long puts and very little in cash flow strategies. Over time that has changed and now her core trading strategies are cash flow based such as are Covered Calls, Naked Puts, and Iron Condors. Though she is still a student learning and enhancing her trading skills, she has a strong desire to teach women to take control of their finances and become traders. Writing blogs is one of the ways she’s is looking to spread the word and get more women involved. Emily knows that with the right education and trading system women can be successful traders.


Tackle Trading: Financial Freedom is a Journey. Sign up now for a 15-day free trial.

Financial freedom is a journey

The Tackle Today series is brought to you by Tackle Trading.

Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.

# Sign up now for a 15-DAY FREE TRIAL #


Legal Disclaimer

Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.

All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.

Leave a Reply

Chart Modal

Tackle Trading