Frank Cappelleri believes the Technology Select SPDR has an opportunity to turn a bounce into a meaningful breakout. This is the kind of analysis you get when someone stares at squiggly lines long enough to see Jesus in the chart. XLK might go up. It might also go down. Frank has narrowed it down to those two possibilities plus sideways, which technically makes him clairvoyant.
The phrase "has an opportunity" does heavy lifting here. My neighbor's cat has an opportunity to stop sh*tting in my garden. Doesn't mean it will. Doesn't mean I should allocate capital based on the cat's technical setup. But Frank sees something in those candlesticks that whispers sweet nothings about resistance levels and volume confirmation, so here we are.
Retail traders will read this and immediately check their Robinhood accounts. They will see XLK sitting there like a drunk uncle at Thanksgiving, completely unaware of Frank's thesis. They will buy calls anyway. They will tell themselves this is different from the last seven times they chased a breakout that turned into a fakeout. They will be wrong.
The Technology Select SPDR does not care about your meaningful breakout. It does not read analyst notes. It moves because algos decided to move it or because some pension fund rebalanced or because Mercury is in retrograde. Frank's opportunity exists only in the same sense that you have an opportunity to win the lottery: technically possible, statistically inadvisable, emotionally devastating when it doesn't happen.
But sure, load up on tech exposure because a guy named Cappelleri drew some lines on a graph and used the word meaningful to describe what amounts to "maybe this time the thing goes up instead of not up."
Your calls expire worthless Friday.
Photo by Anne Nygård on Unsplash
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