The team here at All Star Charts is very bullish on the Oil & Gas Exploration & Production sector as discussed here (premium). Before we get into how we're going to play it, here's a little background to give color for our optimism for the opportunity we see, from our kid off the bench Tom Bruni:

After a long period of indecision and relative underperformance, the Oil & Gas Exploration & Production ETF $XOP is finally breaking out to the upside and confirming a new long-term uptrend. Many stocks within the sector have spent years making no progress and are now finally breaking out to the upside. Normally we focus on sectors showing relative strength and hitting new all-time highs like software (premium), but every sector has its day eventually (see retail) and it looks like these energy names are finally ready to participate...

Excuse the pun, it was too easy.

Everybody loves a deal. And that couldn't be more obvious after looking at a monthly chart of Costco $COST going back to the financial crisis that bottomed out in 2009. Shoppers clearly have been filling Costco parking lots and their carts, as the monthly chart has been a beautiful uptrend with very little volatility.

One of the great things I've experienced while getting All Star Options off the ground with JC has been putting pen to paper to really codify for myself how I view options trading. It's one thing to have a nebulous sort of idea of how I approach certain options strategies and when and how I might employ them, but it's quite another to sit down and really break down how each strategy should work, how it fails, my plans for taking profits and/or cutting losses and opportunities for position adjustments.

Instead of hoarding all this brainstorming for myself, we've decided to add it to the Education section of Allstarcharts.com so that you, too, can have easy reference points for thinking through your own trades.

The thing about options strategies is -- there really isn't any one way to trade each strategy. There are many common practices, but we all have our own interpretations. Mine aren't necessarily better or worse than anybody else's, but I think you'll benefit from seeing my perspective. We can all benefit from opening our eyes to seeing ways that others...

In JC's All Star Charts May Monthly Conference call for subscribers, there was a theme that he consistently revisited: Bonds are going lower.

There's no need to over-complicate this stuff. We could waste time arguing about what increasing interest rates means for the stock market, or yield's implications on policy decisions in Washington, the effect to be felt in the housing market, or how retirees savings may or may not be effected. That might fill airtime on SHOUT!TV, but all we care about here is positioning ourselves to make money. Leave the intellectual debates to the talkers.

We're the doers, and we want to position ourselves for further downside in bonds.

...then you simply have to get long The Granddaddy Oracle $ORCL here.

It appears Oracle has successfully digested the hit the stock took after it's most recent earnings report, and the stock is hanging just above the highs it set back in the year 2000! I could be wrong, of course, but I just don't see $ORCL holding around these levels for too much longer. There's just no way it recoups 2000 levels and then just stops here.

Earlier this week, JC pointed out that the software sector broke out to new all-time highs. I don't mean to keep harping on this, as you've no doubt read JC making this point over and over, but this sector making highs is simply not something we are likely to see if the overall market is pointing to a bear market.

The third largest component in the software index is Service Now, ticker $NOW. And we see an interesting opportunity developing.

In a recent report to Allstarcharts Premium subscribers, J.C. laid out a case why he's bullish on the Industrials sector and why that's important to the overall market. Not ever one to mince words: "we want to be buying right here right now and very aggressively. The bet is that Industrials are now heading higher and leading the market to new all-time highs." That sounds pretty convincing to me!

Please allow me to introduce myself. My name is Sean McLaughlin and I’ve been involved in financial markets as a Trader, Exchange Member, blogger, in building social communities, podcasting, training and in sales for 20 years.

Some of you may already know me or have engaged with me on Twitter, Medium, or StockTwits where I go by the handle @chicagosean. Others may know me from the 7 years I spent as Director of Community at StockTwits, and a few more may know me in my role of Sales, Training, & Strategy at Trade Ideas, LLC.

Wherever you may or may not know me from, I’m happy to be teaming up with my friend JC Parets at Allstarcharts.com to build upon his excellent and unparalleled work in providing actionable insights to the financial community.

Together, we are launching All Star Options to leverage JC’s well known skills in separating facts reflected in price action from the ever deafening social and financial media noise, and combining it with my ability to construct simple, straightforward action plans to...

I've been looking forward to this day all year. All Star Options is now live - Go check it out!

Over the years we've built a customer base of smart, well informed and eager to learn investors from all over the world. Active Traders, Hedge Funds, Banks, Financial Advisors and many others come to Allstarcharts for unbiased technical analysis research with invariable consistency. We service most of the largest and most powerful financial institutions on earth, but the price point is also approachable for investors trading their own accounts.

Since creating this research platform, I've noticed an overwhelming demand for options strategies. Until now, traders have just taken my work and then crafted options trades to express some of my best ideas in the derivatives market. I get emails from Wall Street Traders, for example, telling me how much business they get what they turn my ideas into options trades for their buy side clients. Individual traders do the same, but for their own...

Just because a stock or an index is choppy and moving sideways doesn’t mean we can’t participate in some profits. There’s opportunity in every situation, especially with options.

I'm going to disappoint the options eggheads with my opinions here, because I'm going on gut feel.

I haven't done any exhaustive research. I haven't done any volatility skew analysis or 3D modeling. I haven't reviewed seasonality patterns, or dug deep into open interest imbalances.

No, I haven't done any of that.

Simply trusting my gut, it feels to me fear of stock market risk is being overplayed and everyone who is scared of headlines, trouble in the White House, geopolitics, etc (which seems is nearly everyone) has already fully hedged their risk or has put on speculative short positions and are thus natural buyers into any dips to profitably cover their positions -- which in effect helps to put a floor under equities.

Think about it.

Until proven otherwise, it is irresponsible to be positioning for a bear market right now. The talking heads and twitterverse all seem to be rooting for -- cheering for, even -- the S&P 500 to break it's 200-day moving average and crash further from there.

It's ok to root for any scenario you'd like, but it's simply unprofitable to act on opinions (yours or others) until there is a basis of fact to back you up. And the only facts we focus on here are those presented and derived by price and volume.

The weight of the evidence still points to higher prices in equities over the intermediate term, and as such we're hunting for bullish trades. Today's hunt yielded a developing opportunity in Caterpillar $CAT.