ShadowTraderPro Pairs Trader for August 21, 2009

The ShadowTraderPro Pairs Trader is a daily report which spotlights one equity pair which trades in a definable range and whose stocks are positively correlated. The objective of the newsletter is to present one such pair daily that may be coming into play currently, giving self-directed traders the opportunity to put the pair on watch for possible entry. Additionally, Pairs Trader sends out specific trade recommendations on selected equity pairs. These trades are managed actively via real-time email alerts and are tracked in the Pairs Trader Portfolio.

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If you have any questions or comments regarding commentary or plays in this newsletter, please email to pairstrader@shadowtrader.net.

Pair of the Day

  • Pair: CVX - XOM
  • Sector: Oil & Gas (Major Integrated)
  • Spread 0.03
  • Ratio: 1.00
  • Correlation: 0.80
  • Spread range: -0.80 - 0.65


This is a great pair to have on alert. Note how with a ratio of 1, the stocks are even identical in price currently. The jump higher on 7/31 with CVX being much stronger for a short while is important to note. Notice how historically after such a shift occurs, the pair will settle into a trading range that could last for months, and provide ample opportunities for trading the pair in both directions. Look to set alerts at the upper boundaries of the spread range listed above, buying CVX and shorting XOM at the lower end and shorting CVX and buying XOM at the higher end.

Pairs Trader Portfolio

The matrix below shows all current ShadowTrader Pro Pairs Trader trades in the Portfolio. The Portfolio contains only those plays that are sent out in real-time via email. The Pair of the Day setup above is not actively managed or or tracked. Appearance of a pair in Pair of the Day does not guarantee that the pair will be in play in the Portfolio at any time. Current open positions are on top, with positions that were closed in the current calendar week on the bottom. Closed positions are moved out of the matrix on Monday mornings and posted in our performance page here.

To get the most out of your subscription and for detailed instructions on how to structure your own portfolio, read our Pairs Trader User's Guide

 OPEN POSITIONS - week of 08/17 - 08/21
pair dir sizes date
entered		 entry
spread		 date
closed		 exit
spread		 target stop status mark
to
market		 p&l
points		 p&l
capital		 capital
commit
EXC-VVC long 102, 215 08/18 25.96 n/a n/a 26.74 24.50 open 25.68 (0.28) ($89) $10019
 seems to be bottoming, aggressive traders can add another leg here
LO-PM short 68,109 08/19 27.63 n/a n/a 26.65 29.00 open 27.11 0.52 $62 $9913
 collapsing towards target, look to exit under $27
 CLOSED POSITIONS week of 08/17 - 08/21
sym dir size date
entered		 entry
spread 		date
closed		 exit
spread		 target stop status mark
to
market		 p&l
points		 p&l
capital		 capital
commit
none $0.00
 
  TOTALS: open shares (open capital committed doesn't include closed trades) $0.00

Click here for year to date Pairs Trader Performance - 2009

All content © 2009 by ShadowTrader Technologies, LLC. All rights reserved.

Disclaimer and Waiver of Claims: Disclaimer and Waiver of Claims: The ShadowTraderPro Pairs Trader is a newsletter service, designed as supplemental material for the ShadowTraderPro Newsletter subscription service and it is not intended to be a stand alone newsletter. The risk of loss in the trading of any securities products can be substantial. The strategies mentioned here are active trading strategies, therefore you should carefully consider whether such trading is suitable for you in light of your personal investment objectives and financial resources. This material is for information purposes only and should not be construed as an offer or solicitation of an offer to buy or sell any securities. Past performance of any trades mentioned never guarantees future results.

Securities and options involve risk and are not suitable for all investors. See the characteristics and risks of standardized options.