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Pairstrading

From Stonks to Bonds: ES->ZNThis is another relatively simple idea. As we are at the end of July we can start to take a closer look at monthly charts. 1. August has finished down (open to close) 60% of the time (12 of the last 20 years). 2. Coming into major multiyear trend lines, August seems to have been pivotal... literally. - August 2007 dropped and pierced support but closed above the trend line providing the last bounce before breaking the uptrend a few months later in November 2007. - August 2015 opened below the trend line, tried to stay above but ultimately collapsed. - August 2020? Well here we are in the last week of July retracing the break of the trend line from back in February 2020. With point 1 above and where we currently are in relation to this trend line, this will be important to watch this week. A close at or below the trend line is bearish and this ought to sell off for the next few months. A close above will indicate a bit more of a neutral to bearish stance. So what exactly does this all mean? - Simply put a rotation from stocks to bonds. How to interpret this: - When this chart goes up, the e-mini SP500 futures will outperform the 10 year note futures. - When this chart goes down, the 10 year note futures will outperform the e-mini SP500 futures. Outperforming isn't what you think... How one of these can outperform the other is: a. One goes up more than the other. a. One goes up while the other stays flat. c. One goes down less than the other - aka one sucks less than the other. d. One goes up and the other goes down (typically unlikely but still possible). How to play this: In order to accurately play the situation described above, there would be a simultaneous short position in ES1! and a long position in ZN1! in equal weight (notional value of the contracts). In relation to outperforming: a. The ZN1! long will make more than the ES1! short would lose. b. Same thing as 'a'. c. The ES1! short would make more than the ZN1! long would lose. d. The best scenario, ES1! short makes money at the same time the ZN1! long makes money.
CME_MINI:ES1!Short
by GlobalMarketSignals
New Pairs Trade (Long PEP vs Short MNST)Hey traders, today I share a pairs trade I put on, going long $PEP and short $MNST in equal amounts betting on a reversion to the mean in the next couple of days and with a tight stop loss to limit the downside. These are two similar stocks which make for a great pair and you can see on the Range Strength indicator the pair is currently trading in a strong range which is what we want to see before we take a signal from the Buy Sell Bands. Stay tuned as i'll be updating this trade idea as it progresses. Have a great weekend! Jared
NASDAQ:PEP
by Click-Capital
1
$JSE Gold miners gearing up to outperform platinum miners?The series of higher lows on my RSI and MACD indicator against a series of lower lows in Price is starting to give me some technical indication that we could start to see Gold miners outperform platinum miners. We are seeing Bullish divergence here and it would not surprise to see this pair ratio of (J150 GOLD miners vs. J153 Platinum miners) move from current levels of 0.40 to 0.50 (25%). This will be interesting to monitor as we head into Q1 of 2020 with platinum miners having aggressively outperformed gold miners in 2019.
JLong
by MarcoOlevano
1
Pair Trading Idea DUK/XELDUK and XEL have a 84,3% correlation over 60 market days. Applying some of the most popular indicators on the pair DUK/XEL shows an interesting pattern. While XEL has been clearly outperforming DUK since several weeks, a trend reversal seems to occur. DUK might catch up in the coming days and weeks. The daily and the weekly RSI (1st indicator at the top "Ultimate RSI Multi Timeframe"), the Wave Trend Oscillator (2nd one) and the ultimate MACD oscillator (3rd one from the top) reversed recently from their lower ranges. The Squeeze Momentum Indicator (at the bottom) shows a nice divergence, which is also observable on the RSI . The setup is worth being given a shot: Short XEL, Long DUK . The strategy is market-neutral and is profitable when DUK starts to outperform XEL. Follow me to get regular pair trading ideas!
NYSE:DUK
by Optionopedia
Pair Trading Idea JPM/PRUApplying some of the most popular indicators on the pair JPM/PRU shows an interesting pattern. While PRU NYSE:PRU has been clearly outperforming JPM JPM since several weeks, a trend reversal seems to occur. JPM might catch up in the coming days and weeks. The daily and the weekly RSI (1st indicator at the top "Ultimate RSI Multi Timeframe"), the Wave Trend Oscillator (2nd one) and the ultimate MACD oscillator (3rd one from the top) reversed recently from their lower ranges. The Squeeze Momentum Indicator (at the bottom) shows a nice divergence, which is also observable on the RSI. The price action confirmed the reversal in the last days. The setup is worth being given a shot: Short PRU, Long JPM. The strategy is market-neutral and is profitable when JPM starts to outperform PRU. Follow me to get regular pair trading ideas!
NYSE:JPM
by Optionopedia