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The following article will take a look at a combination of fundamental and historical indicators for several key ETFs: SPDR S&P (NYSEARCA:SPY), SPDR Energy (NYSEARCA:XLE), iShares Treasury (NYSEARCA:TLT), iShares Brazil (NYSEARCA:EWZ), SPDR Gold (NYSEARCA:GLD), and iShares Silver (NYSEARCA:SLV). In the article, we will look at how each has performed from August options expiration to October options expiration to determine any seasonal patterns. In addition to that, we will look at key fundamental information to determine if the ETF is trading at discounts or premiums currently. From there, we will use that information to craft positions for each ETF.

Daily Data: SPDR S&P 500

The market is in a neutral to bullish position right now. Right now it's important see the September to November option expiration date returns to see if we are entering a historically volatile/growth period.


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The returns above show that for 9 of the past 10 years SPY has remained largely less volatile. The worst year was in 2008 during the financial crisis. In other years, the market has posted positive returns for the most part. The reason could be due to investors bidding up the market into the final part of the year. Whatever the reason, there does seem to be some pattern of low volatility. Based on the information above, I suggest the following trade.


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Option Trade: SPY - Sell Nov'16 139/138 put spread (Bull Put Spread)

(Sell 139 Put/Buy 138 Put)

Size - 5% of Option Spread Portfolio Size = (5 spreads)

Entry: Sell Limit: 0.18 (Note: premium not yet available)

Stop Loss: 0.36

Exit Price: 0.00

Max Return: 21.95%

(Max Return Calculated on Return on Risk from my entry, not Return on Margin)

Daily Data: Energy Select Sector SPDR

The energy sector has become popular recently due to Iran, the election year, and a general public interest about the future of oil prices. This combination of anxiety and recent market uptrend has propelled XLE up to new 52wk highs! The trend is definitely up in this stock and I expect a lot of buying should XLE fall to $72. Now, it's time to review the September to November option expiration date returns.


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Above you can see that compared to SPY, XLE has seen relatively more volatility. The 2005 and 2008 returns are worse than SPY, yet the 2010 return is far better. The average return is the same as SPY at -1%. We cannot make any conclusions on the data however we can place a bet that XLE will not see a 2008 repeat. Based on it not declining again as in 2008, I suggest the following trade.


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Option Trade: XLE - Sell Nov'16 69/68 put spread (Bull Put Spread)

(Sell 69 Put/Buy 68 Put)

Size - 5% of Option Spread Portfolio Size = (5 spreads)

Entry: Sell Limit: 0.13

Stop Loss: 0.28

Exit Price: 0.00

Max Return: 14.94%

(Max Return Calculated on Return on Risk from my entry, not Return on Margin)

Daily Data: iShares Barclays 20+ Year Treasury Bond

Bonds are a very important asset class right now. The Fed is holding rates low and the long term trend on 20 year treasuries has been up since at least 2005. That said, investors are worried that Treasuries will collapse on the first rate hike of the Fed. The nice part is the Fed has told us that they do not anticipate raising rates for some time. Thus, if TLT is going to remain neutral to bullish, it's very important for us to look at the September to November option expiration date returns.


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Above you can see that the nice thing about TLT is that it hasn't been that volatile over the years. Instead, the worst return during this time frame has been -4%. Technically, on a daily chart, the stock is at a breakout point. If TLT closes above $125,then I think it's going to move a lot higher towards $135. If TLT cannot close above $125 soon, I think it may be destined to move back down towards $120 but we may adjust our current position accordingly. The trade suggested below is the same that we entered on Friday.


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Option Trade: TLT - Sell Nov'16 119/118 put spread (Bull Put Spread)

(Sell 119 Put/Buy 118 Put)

Size - 7% of Option Spread Portfolio Size = (7 spreads)

Entry: Sell Limit: 0.18

Stop Loss: 0.45

Exit Price: 0.00

Max Return: 23.45%

(Max Return Calculated on Return on Risk from my entry, not Return on Margin)

Daily Data: iShares MSCI Brazil Index

The iShares Brazil Index ETF is always a popular security which has been in a slump since March. Moving forward I think the ETF will see a big turnaround once two of its top holdings get back on trade: VALE and PBR. Below are the September to November option expiration date returns.


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Above you can see that apart from 2008 EWZ performed very well in the September to November period. Right now we see that the stock is trading right below the max low if we ignore a possible 2008 sell-off occurring this year.


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Option Trade: EWZ - Sell Nov'16 53.50/53 put spread (Bull Put Spread)

(Sell 53.50 Put/Buy 53 Put)

Size - 2.5% of Option Spread Portfolio Size = (5 spreads)

Entry: Sell Limit: 0.19

Stop Loss: 0.40

Exit Price: 0.00

Max Return: 61.29%

(Max Return Calculated on Return on Risk from my entry, not Return on Margin)

Daily Data: SPDR Gold Shares

The recent breakout in gold has investors thinking the monthly uptrend may have resumed. If so, we may see GLD at $200 by December-February. Unfortunately, the data on GLD does not go back further than 2005 for the September to November option expiration time frame.


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Above you can see that GLD hasn't ever dropped much during this time frame. During 2008 decline was only -8% as investors were probably looking for a safe haven investment. The only reason that GLD probably declined in the 2008 period is because banks were selling everything in the market to free up cash.


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Option Trade: GLD - Sell Nov'16 162/161 put spread (Bull Put Spread)

(Sell 162 Put/Buy 161 Put)

Size - 5% of Option Spread Portfolio Size = (5 spreads)

Entry: Sell Limit: 0.14

Stop Loss: 0.30

Exit Price: 0.00

Max Return: 16.27%

(Max Return Calculated on Return on Risk from my entry, not Return on Margin)

Daily Data: iShares Silver Trust

The recent parabolic rise in GLD was striking but just as impressive was that of SLV. With the price of silver more closely related to the economy due to its use in electronics, it was only a matter of time before SLV would rise in price. Unfortunately, the data on SLV does not go back further than 2006 for the September to November option expiration time frame.


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I cannot make any conclusions on such a small and volatile data sample. Also there are no premiums available at or below the $26 level to suggest a trade at this time. I may look at the $30 level at a later date. Perhaps the only way to trade SLV right now is right at the money betting that it will book a positive return during this time frame

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: The Oxen Group is a team of analysts. This article was written by Giorgio Ferrero, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.