This has happened right before the last two crashes, and when the spread closed, a bottom (and a great long opportunity) formed. Watch this closely, the writing is on the wall. I'm holding SPY shorts, as well as oil, for the time being, expecting considerable downside in the short term. I think the catalyst will be on Friday, after NFP solidifies the rate hike fears. See related ideas for more information. Please leave your comments or inquiries below. I'll be making a live presentation this Friday, before NFP. Be sure to attend, I'll publish the link in this publication's updates.
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Cheers!
Ivan Labrie
Link to Tim West's chatroom: tradingview.com/chat/ We discuss setups like this often there. Feel free to stop by and subscribe to his indicator pack. If you have any questions ask.
Risk disclaimer: My analysis is provided as general market commentary and does not constitute investment advice. I will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Komen
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Check the related ideas to see how technical analysis was used to decipher this top in S&P. We had the Yen, Nikkei, Gold, S&P/Gold ratio warning us first, then more hints from this spread, Dow/Snp ratio and finally, the drop started in SPY.
Komen
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One side had to give, in this case it was oil...looks like more upside is in store for both instruments.
Komen
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Looks like this spread will close.
Komen
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I'd simply focus on shorting SPX at this point, the long oil position should have been closed already.
Please forgive my ignorance. On your chart is the SPY and USOIL, is the correct. And the potential pattern is for them to re unite or come closer together towards the middle?....with oil going up and Spy going down? Is this correct. Just want to make sure I understand.
IvanLabrie
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Correct. This is mostly an analysis piece but you can take the pair trade you describe. If you need to know how to do it message me. Pair trading v has a higher winning ratio than trend following but potentially lower reward to risk ratio. Cheers
felix997
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you should wait employment number friday
to short the spx
imo
IvanLabrie
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Hi, I already shorted at 2183.3 actually, a couple days ago.
Let's see how it goes.
Not_A_Bear
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what does that diverging purple line represent?
IvanLabrie
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It shows the % spread difference.
solo
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Ivan please forgive my ignorance but how do I recreate this chart on my tradingview ? I really like the correlation
IvanLabrie
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Hi, message me on Skype tomorrow and I can give you a few pointers.
There's a button called compare which has a scale the icon.
You can also use multiple chart windows if you have a pro account or plot the symbols as a ratio or use any other operation.
oilyprata
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sorry can i ask a quick question please? what does NFP stand for? cheers!
IvanLabrie
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Non Farm Payrolls. It's a jobs report released on Friday, which will help determine if increasing interest rates in the US is safe, at least according to the 'data dependent' Federal Reserve.