Response:
First, we forecast the DJIA and not the energy spider XLE. While the DJIA
is highly correlated with the SP500, it is only weakly correlated with XLE. If
you were selling put options on DIA or SPY, you would be more likely to make
money if our model was giving a strong UP signal as these options would probably
expire worthless. Whether our system is of use to you depends on how you intend
to use it.
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