The next long term trade

OK.

nitro

Quote from kgharris:



I didn't post to debate the drawing of trendlines - but from my experience there is no right or wrong way. The t/l was drawn from the highs of 2002 and has three touches going into April, so I think it qualifies as valid.
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Quote from kgharris:



Thanks - I am up over $4 already. Remind not to waste my time posting again.

:p
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Yo dawg. I'll take 5% per month in my IRA. Nice trendline.

Peace.
 
Quote from kgharris:



Thanks - I am up over $4 already. Remind not to waste my time posting again.

:p
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what i mean to say, good, but still dumb trendline.
 
Drawing a trendline is one of the easist things a person can do. I bet a 5 year old could do it better than that.
 
I don't have much of an opinion on the trade, maybe just that PG is probably what you'd think of as a defensive name. Doesn't mean it can't go down, or go down more than the Dow.

Overall though, if or when this market shows some strong evidence that it's cracking I think there are going to be some cracker candidates for shorting. Although I haven't updated it in the past month, as I've been too into this latest rally, keeping a list of potential shorts should things start to break down can be really handy. If/when things do, I'd like to (eventually) get a whole book of shorts out there, certainly do more than just a single spread trade.

Btw, that is one of the strangest "trend" lines I've ever seen! :)
 
[Sorry, I missed this post!]

Yes,

Take a look at the NAZ vs DOW below. Maybe Long YM, short NQ, and short PG? Or maybe, short YM, long PG, short NQ? ( You would need a shit load of long PG in the second spread)

Fascinating...

nitro
Quote from Avalanche:


...Personally I would tend to agree with the poster that wrote that it is mainly lagging the dow because a lot of money has played the more agressive names lately. (i.e. the higher beta ones like INTC).

Here is a chart of the Dollar Index. Took a dive the other day.

http://futures.tradingcharts.com/chart/US/93
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Attachments

Funny that you mention PG. I was also doing some stuff with it a couple of days ago.

My trade: A pair trade.
Long JNJ/Short PG, Ration: 1:1.
 
Nice.

That is a classic way to pair PG.

nitro
Quote from heilbronner:

Funny that you mention PG. I was also doing some stuff with it a couple of days ago.

My trade: A pair trade.
Long JNJ/Short PG, Ration: 1:1.
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Trades that are working well today:

L YM/ S PG
L JNJ/ S PG

Trades that are not working well are long PG short anything that was suggested to pair it with.

That the longs are making money on the way up is as expected (overcoming the short PG.) However, the interesting question will be when it turns - will Short PG make us money on the downside?

nitro
 
By the way, is there a really good book out there regarding pair trades?
Haven't found one yet. Still looking for.

IMHO pair trading is even more interesting than in the past, because one can use SSF, index stocks and mix it with stocks and options.
 
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