timwest

PAIRS TRADE - Buy WMT, Short SPY

BATS:WMT   WALMART INC
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2
Here is just another way to look at how nicely WMT is positioned versus the overall market. The recent wave of news pushed WMT down to a decent level and the recent linear-rally in the overall market (perhaps dragged up by technology and oil shares) has a reasonable profit-potential sitting on the table.

Upside: 5% in the next two weeks.
Risk: 5%.

By: Technical Tim, March 5, 2012 3:52PM EST
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Comments

Great call, thanks Technical Tim
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timwest MyPriorSelf
Thanks gnomishmath :-) It is great to trade in a way that cuts down on the "market risk". I have pointed out GE versus the market also, in case you are looking for other super-cap pairs. Cheers.
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charttrader MyPriorSelf
Agree, well done Tim.
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This trade has worked tremendously on a longer term basis.
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At the close of March 5th, SPY was 136.77 and now it is 140.35 for a gain of 2.62%. WMT was 59.37 and now it is 61.02 for a gain of 2.78%. Not much return for this trade so far. Tim, Friday 2:35PM EST March 16, 2012
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Good one Tim, Got in that trade a little bit early on Feb 22. Just curious , how do you find your pairs ? I use standard deviation, correlation in an excel sheet
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timwest Algokid
I read news stories, articles and watch price action. My brain just stores all of the combinations that I track. TradingView lets you see how something is acting relative to something else. I also plot ratios at stockcharts.com by separating the symbols with a ":" and no spaces. It is a great way to look at ratios. Typically, I keep in mind what stocks are moving on news, then remember to check out where they are about 3-5 days later. How many pairs do you monitor?
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Algokid timwest
Yeah, that stockchart.com tip that you gave has helped me a lot with the pair trading, thank for sharing that again. Right now have 6 pairs open, most of them in natural gas. Everything was going ok until natural gas started a descent back in early January. The spread between the stocks became too big ( 20 % + ) so i had to take some losses . I'm now revising my pairs and try to diversify them in different sectors, hence why i haven't posted any new pair trade lately.
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admin timwest
We are adding this to TradingView now. Please do not forget to vote here:
https://getsatisfaction.com/tradingview/topics/ratio_and_spread_feature_for_pair_trading_purposes
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