Intermediate Trade: XLE

The idea that the energy names should have recovered this quickly is silly. As I stated yesterday, they are in the middle of a huge short squeeze. They are probably going to drop, but could pop, too. However, like a 2 a.m. bar call, they simply can't stay here.

I like owning a slightly directional strangle. VXXLE (the VIX of Energy Select Sector SPDR (XLE)) is about 32, and could run right back to 35-40 range. I would buy an XLE April 59/63 strangle for about $3.10, knowing that if there is a short squeeze it could really pop, and if the squeeze comes off a trip back to $55 is imminent....15 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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