This Daily Chart plots LABU to LABD ratios over time. LABU is 3X Leveraged ETF of a variety of biotechnology stocks while LABD is the inverse.
By plotting the ratio of LABU to LABD, what can be found is the precise end of the LABU downtrend (LABD uptrend) and reversal into LABU uptrend ( LABD downtrend).
In this case, the reversal occurred about June 17th while the SPY reached its current market bottom.
This type of analysis can be used to make trade decisions regarding a contrasting pair of stocks or forex pairs. It makes the decisions more informed. IF going down to a 1H or 4H timeframe, the accuracies will be higher and the pivots more frequent also making potential profits higher.
This can be used with other ETF inverses such as
GUST /DRIP BOIL /KOLD JDST / JNUG YINN / YANG SOXL/ SOXS FAZ / FAS TMF /TMV
By setting up all of these also with alerts such as ratio decreasing or ration increasing a trader with very little time to trade and diversify and automate his/her trading resulting in risk stratification and mitigation and economy of time.
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