Limited Time: Buy XLE Before the Energy Sector Takes Off
A Night to Remember: Celebrating in Miami
I recently had the pleasure of attending my nephew's wedding in beautiful Miami, and it was an unforgettable experience. The venue, Fountainbleau, was stunning, with its sleek modern design and picturesque surroundings. The cocktail hour took place on the rooftop, offering breathtaking views of the city, while the reception was held in the grand banquet hall.
The evening was filled with elegance and joy, as friends and family gathered to celebrate the union of my nephew and his bride. The banquet hall was transformed into a winter wonderland, with twinkling lights, beautiful flowers, and a sumptuous dinner that left everyone in high spirits. The atmosphere was electric, with laughter and music filling the air.
A Neurosurgeon with a Passion for Life
My nephew, a talented neurosurgeon, has always been someone who lives life to the fullest. Having just started his career a couple of years ago, he's already making waves in his field. But what struck me most was his passion for DJing, a hobby he's maintained well into his 30s. It's clear that he's retained a sense of youthful energy and enthusiasm that's inspiring to behold.
Watching my nephew and his friends, I couldn't help but think about how they've redefined what it means to be in their 30s. They're living life with a sense of freedom and joy that's reminiscent of my own twenties. It made me wonder, are younger generations simply embracing adulthood on their own terms, or is there something else at play?
A Night to Cap Off the Celebration
The night didn't end with the reception – we took the party to a nearby nightclub, dancing the night away with friends and family. It was a fitting conclusion to a day that was equal parts celebration, love, and living life to the fullest.
My nephew's wedding was a reminder that life is short, and we should make the most of every moment. His passion for life, medicine, and music is a testament to the power of following your dreams and embracing every stage of life.
It also underscored something I see every day in the markets: the people who end up “rich” in the ways that matter are the ones who balance discipline with joy. My nephew didn’t wait to “arrive” in his career before giving himself permission to enjoy his passions—he built them into his life alongside the long hours and hard work. Investors often make the opposite mistake: they either overwork their portfolios, chasing every hot idea like a night out that never ends, or they delay living until some arbitrary number shows up on a statement.
The healthier approach is closer to what I saw in Miami: a long-term plan (the marriage, the medical career), paired with intentional moments of celebration (the DJ sets, the nightclub, the rooftop views). In investing, that means having a clear framework for risk, time horizon, and position sizing—while still allowing room for calculated risk-taking and the occasional “dance floor” opportunity when markets present them.
Cheers to the happy couple – and a quiet reminder to all of us: build portfolios that support a life you actually want to live, not just a balance you admire on paper.
Recent Trade Review: Exxon Mobil (XOM)
Last week in the Dynamic Power Trader (DPT) service, we took a long trade in Exxon Mobil (XOM). Our DPT model identified XOM as a high-probability setup during Tuesday’s Live Trading Room session, with macro conditions (energy sector strength, supportive crude trend) and micro factors (solid balance sheet, strong cash flows, constructive technicals) all lining up. Watch the full recording!
As always, the trade started with risk management: clearly defined entry, stop just below recent support, and profit targets for scaling out. The idea wasn’t just “XOM looks good,” but “here’s exactly how much to risk, where we’re wrong, and where we’ll take profits.”
This is also where paid vs. free makes a real difference. Free content can highlight names like Exxon Mobil, but DPT members receive real-time SMS alerts telling them when to get in and out, based on the same models we used live. That combination of expert analysis, rules-based tools, and timely execution is what turns a good idea into a disciplined, repeatable trade.
Current Trading Landscape
Shutdown relief and a softer tariff tone are colliding with higher-for-longer rates and AI valuation risk. With the VIX sitting near 17 and the major indices consolidating just below all-time highs, this is still a market that rewards selectivity, respects the range, and increasingly insists on quality.
U.S. equities spent the week grinding sideways rather than breaking out or breaking down. The tape has been about rotation and digestion, not a clean trend. Underneath the surface, investors are weighing record shutdown headlines, tariff rhetoric, and a packed earnings slate that includes Nvidia (NVDA), Disney (DIS), and Applied Materials (AMAT), all against a backdrop of macro data uncertainty.
The week’s tone was set early by progress toward ending the record-long U.S. government shutdown. Bipartisan movement in Congress and the eventual resolution after more than six weeks sparked a strong Monday rally, particularly in cyclicals and small caps, as fears of prolonged fiscal disruption and missing economic data eased. At the same time, the shutdown’s long tail is still being felt: delayed jobs and inflation reports have complicated the Fed’s reaction function and kept investors guessing on the exact path and timing of rate cuts.
Layered on top of that were blunt warnings from major bank CEOs. Public comments flagging the risk of a 10–20% equity pullback over the next 12–24 months poured gasoline on existing concerns about AI and mega-cap tech valuations. That helped trigger a tech selloff earlier in the week, even as some companies posted strong numbers. Palantir’s double-digit revenue growth and raised guidance still weren’t enough to protect the stock once markets decided the valuation bar had simply gotten too high. The message was clear: in crowded AI trades, “beat and raise” is no longer a guarantee of upside.
Tariffs and trade policy added another swing factor. Reports of a softer and more measured stance on China—particularly around semiconductor and EV duties—helped semiconductors and export-heavy industrials stabilize and even bounce after prior jitters. That moderation gave chipmakers and globally exposed names some breathing room, but markets still treat trade and export controls as an ongoing structural risk rather than a solved issue.
Earnings reinforced the idea that this is a valuation-sensitive, policy-aware market. Applied Materials (AMAT) delivered better-than-expected results and solid guidance tied to AI-driven chip demand, yet investors immediately drilled into export restrictions and China exposure before deciding how much of that future growth is already priced in. Nvidia (NVDA) remains at the psychological center of the AI trade heading into its upcoming report, where the stakes are as much about positioning and sentiment as about the numbers themselves. In media and consumer, Disney’s (DIS) latest update again highlighted the push-pull between streaming growth and legacy TV/linear headwinds, turning the stock into a live barometer of consumer health and business model transition. Meanwhile, ongoing deal chatter around Warner Bros. Discovery and potential bidders like Paramount Skydance, Comcast, and Netflix underscores that scale, content libraries, and cash-flow visibility are the key currencies in modern media.
Rates continue to enforce discipline. The 10-year Treasury yield remains volatile but contained in a 3.6%–4.2% range—high enough to cap further multiple expansion, not high enough to force a disorderly unwind. Combined with early signs that unemployment is edging off the bottom, the takeaway is “higher for longer” on funding costs and less room for the market to grow purely on multiple expansion.
Against this backdrop, I remain in the market-neutral camp. Momentum has resumed and the long-term trend in U.S. equities is intact, but the risk profile of that trend has changed. I continue to view SPY as trading in a broad, but actionable, band: support in the 620–640 zone if sentiment wobbles but fundamentals hold, and room for the rally to extend toward 680–700 if earnings stay resilient, AI and chip spending remain strong, and the Fed avoids hawkish surprises.
Practically, that means staying invested but highly selective. Into strength near the upper end of the range, it makes sense to avoid chasing crowded AI leaders and frothy growth stories. Into weakness closer to support, the opportunity is to upgrade quality—leaning into stronger balance sheets, clearer cash-flow visibility, and reasonable valuations. With tariffs, macro data, and marquee earnings from NVDA, DIS, and AMAT all in play, volatility around headlines is best treated as a chance to improve portfolio quality, not a reason to abandon a disciplined plan.
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SECTOR SPOTLIGHT
In a week dominated by shutdown drama, tariff recalibration, and endless debate over AI valuations, one corner of the market started to benefit from the very crosscurrents rattling the headline leaders. While investors argued over how much they should pay for future cash flows in high-multiple growth stories, capital began drifting back toward businesses whose value is tied to something simpler and more tangible.
The “Current Trading Landscape” tells the story. Washington finally moved to resolve the record-long government shutdown, lifting a major overhang on growth and restoring confidence that key economic data will return. At the same time, the tone around tariffs softened, easing some of the pressure on globally exposed industries and reducing the odds of an outright trade shock. Yet those positives collided with a “higher for longer” rate backdrop and blunt warnings from major bank CEOs about the potential for a 10–20% equity pullback over the next year or two.
That combination—policy relief on one side, valuation and rate anxiety on the other—has been tough on the market’s most crowded trades. AI-linked megacaps and high-multiple tech remain front and center, with Nvidia’s upcoming earnings treated as a referendum on how long the AI boom can justify current pricing. Applied Materials sits at the intersection of that story and policy risk, as investors weigh strong demand against export restrictions and China exposure. Disney, meanwhile, continues to trade as a live test of how much patience the market still has for complex turnaround and streaming narratives. Layer in a VIX around 17 and indices consolidating near all-time highs, and you get an environment that is clearly more sensitive to valuation, positioning, and policy headlines.
It is exactly in this kind of tape that investors rediscover their appreciation for sectors grounded in real assets, pricing power, and visible free cash flow. As shutdown fears eased and the tariff tone became less threatening, expectations for global demand stopped deteriorating and the conversation shifted from “how bad can this get?” to “who benefits if we simply muddle through?” At the same time, higher rates made it harder to justify paying any price for long-dated growth, pushing investors toward areas where cash returns are front-loaded rather than hypothetical.
That backdrop has quietly favored the companies that turn physical inputs into steady earnings and cash distributions. Their fortunes are tied less to whether the next AI headline lands just right and more to the balance between supply, demand, and disciplined capital spending. In a week where tech and growth spent as much time defending their multiples as celebrating their narratives, this group began to look more like a source of offense than just a defensive parking place.
All of that brings us to the sector in focus: energy, expressed through the Energy Select Sector SPDR Fund, XLE. XLE concentrates the largest integrated producers, refiners, and service names into a single, liquid vehicle, giving investors direct exposure to companies that generate substantial free cash flow, pay competitive dividends, and have a long track record of managing through policy noise and economic cycles. In the current environment—where shutdown relief, a softer tariff tone, and higher-for-longer rates are all in play—energy looks increasingly well-positioned as a way to stay invested, participate in cyclical upside, and lean into cash flows that do not depend on perfect execution in AI or media.
As the market continues to consolidate near all-time highs, with volatility contained but not sleepy, XLE offers a way to express a simple, disciplined view: if the economy avoids a hard landing and policy risk moderates at the margin, companies that convert real assets into cash can steadily take share in portfolios from the more speculative corners of the tape.
TRADE OF THE WEEK: Exxon Mobil (XOM)
Within that sector framework, Exxon Mobil (XOM) is the name I want to own and the symbol I’ll be adding to my portfolio.
This week’s trading landscape favored companies that sit at the crossroads of macro stability and micro strength. The resolution of the government shutdown removed a key uncertainty around growth and data, while the softer tone on tariffs helped calm fears of a sudden hit to global demand. At the same time, the market was reminded—through bank CEO commentary, AI volatility, and the setup around Nvidia, Disney, and Applied Materials—that richly valued, policy-exposed growth stories are living under a much brighter spotlight than they were earlier in the year.
XOM fits this moment almost perfectly. As one of the largest, best-capitalized integrated energy companies in the world, Exxon combines scale, asset quality, and financial strength in a way that directly addresses the concerns highlighted by this week’s tape. Where many AI and tech names are being questioned on how much future growth is already embedded in their valuations, Exxon’s case rests on current and near-term cash flows driven by upstream production, downstream margins, and chemicals, all backed by a disciplined capital spending program.
In a higher-for-longer rate environment, that profile matters. Investors are increasingly being forced to choose between stocks that need falling yields and expanding multiples to work, and stocks that can justify their place in a portfolio through earnings, dividends, and buybacks alone. XOM clearly belongs in the latter camp. As shutdown fears faded and the market shifted back toward sectors with tangible cash-flow support, integrated majors like Exxon were natural beneficiaries. They offer exposure to cyclical momentum without requiring investors to underwrite aggressive, long-dated growth assumptions.
This week’s crosscurrents reinforced that dynamic. While tech and AI names swung around commentary on overvaluation and the looming Nvidia print, energy’s narrative was simpler: a more stable macro path, fewer immediate tariff threats to demand, a market still digesting prior drawdowns, and a renewed appreciation for balance-sheet strength and shareholder returns. In that context, incremental buying in XOM is not a speculative bet on a new story, but an extension of a proven one.
From a portfolio-construction standpoint, adding Exxon here serves multiple purposes. It provides direct exposure to the very sector that the current environment is quietly favoring. It helps balance the risk of owning high-multiple growth and AI names that remain sensitive to every policy and earnings headline. And it aligns with a market-neutral view that expects more sideways movement, rotation, and dispersion rather than a straight-line melt-up.
In short, this week’s trading action strengthened, rather than weakened, the case for XOM. As shutdown relief, tariff moderation, and valuation discipline continue to shape the tape, Exxon Mobil stands out as a high-quality way to express the energy thesis through a single name—one that I’m comfortable adding to my own portfolio in this phase of the cycle.
This week, I’ll add Exxon Mobil (XOM) to my portfolio!
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One more thing, I've had the opportunity to take additional action with a great organization supporting families in Ukraine directly. Gate.org is a foundation where fundraising is held for specific families, allocating funds to multiple families currently living in Ukraine. I am on the board of directors for this great initiative and encourage everyone to check it out and donate if possible. The war in Ukraine is escalating, and families are being negatively impacted and displaced daily. To learn more about this initiative to help families, please see the link below:
Wishing you a week filled with resilience, growth, and prosperous opportunities!