The Long & Short Of It - Short VLO and PSX
Today we are highlighting the following pair trade: Long Lockheed Martin (LMT) and Short Boeing (BA). The main driver for the ideas is the strong multi-factor model score of BA vs. LMT as well as the small base pattern of BA.
The U.S. indices had a good bounce last week, but not enough to change the overall outlook which remains cautious. The S&P 500 had a 5% rally off the MFU-4 target based on the daily timeframe, but all it has really done is to rally into a zone of resistance. The intermediate-term momentum measures remain weak. We continue to see more weakness in Growth relative to Value.
Pair Trade Idea - Long DIS Short NFLX
Not to late to reduce exposure in both names.
Taking a shot at shorting the Nasdaq 100 here with a stop of 7050.
Crude looks good for a long trade for a tactical trader. Gold remains in a favorable position.
If we close on the low today, Monday will likely be very ugly.
The Nasdaq 100 is down 187 points from the MFU-3 target of 7077. We would remain short.
Of particular note is the negative money flow units that are underway for the U.S. market. Most of the downside targets are coming in at -15% to - 20% from this years highs. The European markets remain very weak as does the Hang Seng and China. The Nikkei has developed a negative money flow unit this week.
The Nasdaq 100 has rallied up to a MFU-3 target of 7077 and a tactical zone to put a short on. Stop 1090
The Nasdaq 100 is back down to a critical level at the MFU-3 target area of 6930. Typically, we would see a rally from this zone with a retest which we are now getting.
The S&P 500, Nasdaq Composite, Russell 2000, MDY and Dow Transports have all reversed from areas of support. Ideally, we would like to see any pullback create a higher low which would setup a bullish move higher into year end.
We spent quite a bit of time ranking, screening and then reviewing all 673 constituents of the S&P Core Value index. In so doing, we have come up with 60 stocks that have held up well on an absolute, and more importantly on a relative basis.
The S&P found "a low" at the MFU-3 target generated on teh daily timeframe, as well as the "Ellipse" turning point indicator.