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
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.
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.