IvanLabrie
Short

SPX500/USOIL: Spread is reaching critical mass

FX:USOIL   Crude Oil (WTI)
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: https://www.tradingview.com/chat/#c8BzrhGRvXxGXWnJ
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.
Comment: 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.
Comment: One side had to give, in this case it was oil...looks like more upside is in store for both instruments.
Comment: Looks like this spread will close.
Comment: I'd simply focus on shorting SPX at this point, the long oil position should have been closed already.
Comment: Long oil should be fine for now.
BOOOOM !!!!!
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Hi Ivan, thanks for the chart, hope the pattern effect will repeat again? to enter this trade can we go long in crude and short in SPX here?
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IvanLabrie PRO keshavreddi
I wouldn't personally long crude but yes that is also viable. If your position size is based on average true range in the monthly then it'd be a profitable trade too. The other tradable spread is long usdcad and long oil, but you can simply use it as your signal to time the usdcad or spx500 trade.
Cheers
+1 Reply
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.
+1 Reply
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
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It is a good chart!
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I love correlation trades, but I stick to high correlation trades (above -+ 90). Are you trading other correlations like AUDUSD to NZDUSD or the likes?
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IvanLabrie PRO kniedoborski
Yes, I usually trade audcad, nzdcad, eurgbp, gbpchf, eurnzd, euraud, gbpnzd, gbpaud and eurjpy.
They all act as mean reverting pairs.
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sorry can i ask a quick question please? what does NFP stand for? cheers!
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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.
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what does that diverging purple line represent?
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IvanLabrie PRO Not_A_Bear
It shows the % spread difference.
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solo PRO IvanLabrie
Ivan please forgive my ignorance but how do I recreate this chart on my tradingview ? I really like the correlation
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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.
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you should wait employment number friday
to short the spx
imo
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Hi, I already shorted at 2183.3 actually, a couple days ago.
Let's see how it goes.
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