ShadowTraderPro Pairs Trader for August 25, 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: LLTC - SMH
Sector: Semiconductors
Spread 1.88
Ratio: 1.08
Correlation: 0.98
Spread range: 1.55 - 2.35

Slightly different type of pair here where we are pairing an ETF with one of its component stocks. It makes sense that Linear Tech and the ML Semiconductors HLDR often move in lockstep when LLTC makes up about 5% of the SMH. You can also think of this as a pairs trade of LLTC vs INTC and TXN as those two stocks make up about 45% of the SMH ETF. We'll be listing more semis pairs soon in Pair of the day as we continue onward.

With the 10ma almost completely flat here, use the lower end of the above listed range to buy LLTC and short SMH and the upper end to short LLTC and buy SMH.

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

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
OPEN POSITIONS - week of 08/24 - 08/28
none													$0.00

CLOSED POSITIONS week of 08/24 - 08/28
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
EXC-VVC	long	102, 215	08/18	25.96	08/24	27.46	n/a	n/a	closed	n/a	$1.50	$48	n/a
	Closed for profit after reversal off of trendline
	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.