STI - Trading-Oil and Others

 

Out of 50 public companies in the oil industry—spanning all sub-sectors from exploration and production to refining and services—with an average daily volume exceeding 1,000,000 shares, a price above $10 per share, and a market cap over $5 billion, 45 of them closed higher yesterday.

Of those 50, 44 closed above their 50-day Simple Moving Average (SMA), and all 50 are currently tracking above their 200-day SMA.

Additionally, 26 of them currently exhibit a positive slope in price.

Today, May 19, out of those same 50 oil companies, 43 managed to close higher once again, while only 7 registered a negative closing price.

At the close of May 18, 26 companies had a positive slope; today, that number stands at 31. Are we witnessing the birth of a new bullish trend in the oil sector?

Let's take a closer look at one of them: Halliburton Company (NYSE Ticker: HAL). It is one of the world's largest multinational corporations in the oilfield services and energy sector (outpaced globally only by SLB). Their business model does not revolve around extracting or selling oil directly, but rather providing the technology, engineering, and machinery that enables oil companies to do so.

It shows a well-defined trend so far. As the saying goes, "A trend is assumed to be in effect until it gives clear signals that it has reversed."

HAL rallied 2.44% yesterday, and followed through today closing up +0.47%.

 

 

 

And how is "the index" holding up? Has the SPY ended its nearly 2-month upward trend and shifted into a negative posture? Or is it simply taking a brief pause to catch its breath before resuming the run? A trader's job is not to predict, but to react. Therefore, we will continue to monitor the index, and in the meantime...

 

Looking at KRE, the regional banking ETF, my watchlist includes 28 banks. On May 18, all 28 closed in the green, which looks more like a pause within a broader downtrend. Today, May 19, 22 of them closed lower. The chart distribution of KRE mirrors virtually all 28 bank charts in my screen; they appeared to be triggering a downtrend, but price action over the last 5 days has shown indecision. We will watch closely: if the downtrend resumes, there is a massive selection of banking stocks ripe for short selling—and the beauty of bank stocks is that practically all of them move in tandem.

 

 

My core conviction: this rally in the SPY lacks fundamental backing when two of the most heavily-weighted stocks in the index failed to join the move.

 

Good night.

STI Trading-Sectors, Setups, and the S&P 500

 

As short-term traders—whether operating on a scale of minutes or days—we often tend to focus on the S&P 500 because it is the most liquid and widely followed index in the world. Its proxy, the SPY ETF, provides both investors and speculators with an average daily volume of 50 million shares and a massive array of options with diverse strikes and expiration dates.

The S&P 500 futures contract, the E-mini, moves millions of dollars in notional value daily. It is the preferred vehicle for hedge funds and institutions to manage risk through hedging, trading an average of 1.3 million contracts per day.

This is why the S&P 500 is considered "the market" by many. However, the reality is that the index is market-cap weighted. Out of the 500 companies that comprise it, just 8 stocks account for roughly 30% of the index's weight. Since most of these are tech giants, we can argue that rather than representing the entire economy, the S&P 500 is essentially a technology index.

Top Components of the S&P 500

Company	Ticker	Approx. Weight
Microsoft	MSFT	~7.1%
Apple	AAPL	~6.2%
Nvidia	NVDA	~5.1%
Amazon	AMZN	~3.7%
Meta	META	~2.4%
Alphabet	GOOGL/GOOG	~4.1% (Combined)
Berkshire Hathaway	BRK.B	~1.7%
Eli Lilly	LLY	~1.5%

When you sum the weights of these top holdings, they exceed 25-30%. This creates a structural divergence: you can have a market where 60% of stocks are declining (poor breadth), yet the index finishes in the green simply because the "Top 8" had a strong session.

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Analysis of Market Behavior

Below is a 4-minute chart of the E-mini U25 contract from June 17, 2025. This was a typical sideways market day, indicative of indecision. The price action during the early hours failed to establish a clear trend; it wasn't until approximately 1:00 PM that a downward trend finally took hold.

 

 

Now, let’s look at the SPY daily chart for the December 2025 – March 2026 period.

 

 

Similar to the intraday behavior mentioned above, the S&P 500 moved sideways for three months. This type of environment is often enough to deplete the capital of even the most active traders. Naturally, being a "tech-heavy" index, the technology sector performed poorly during that same timeframe.

  

 The Opportunity in Sector Rotation

 

 

However, there are almost always sectors moving in the right direction. If you identify them early, opportunities abound. Even Utilities managed a monthly rally while the SPY remained stagnant.

This brings us to today’s close and the near-parabolic move we are seeing in the SPY, while other sectors remain flat or nearly unchanged.

 

 

Good luck to everyone,