Spread Trade Opportunity in Semis
The chart below plots the ratio of AMD vs. INTC. With AMD’s dramatic decline of late the ratio sits on long-term support line (1). A potential spread trade here would be to go long AMD and short INTC. The trade…...
Continue to Believe that China Can Remain a Source of Out-Performance
Historically we’ve focused this thesis on the idea that such out-performance would come via the SPX. That said, with a little bit more digging, the ratio charts below also suggest that the SSEC can out-perform the companies that have historically…...
Are Prices Really the Only Thing That Matter?
If so, what are the prices of the two asset classes below suggesting about the likely winner of the upcoming U.S. presidential election? Or, am I reading too much into the tea leaves here?
Set-Up in CAD$ Appears Unfavorable; Could Lead to Continued Softness in Crude, Out-Performance in Airlines
We find the set-up in the CAD$ unfavorable, both technically and from a sentiment standpoint. Technically, the FX finds itself facing very stiff resistance region (A) which marks highs dating back to 1972 as well as 2008/2011. At the same…...
The Case for Euro Financials Out-Performing the Broader Market Remains Compelling
Here is some background on how we’ve approached this subject in the past here and here. In a nutshell, we’ve been favorably disposed to Euro financials since May and have believed they could out-perform both the broader market and their…...
Long CREE / Short PANL Spread Trade Up 12% Since September 27th Post
Wanted to update this idea/thesis given the nice pop in CREE today. On September 27th we had a post that noted a spread trade opportunity had emerged in the flat panel/LCD space. That post can be found here and the chart…...
Relative Strength of DJ Investment Services Index at a 20 Year Low
I believe we discussed informally (phone, email, etc.) the possibility that investment services / asset manager-type companies could outperform over the coming months. This thesis and discussion revolved around the following: 1) Potential for a material rally in equities, based…...
Additional Thoughts on Commercial Trucks
Long story short… NAV, SRI and the ratio of NAV vs. CMI all likely have more downside ranging from 5%-25%. NAV likely has 15%-25% more downside. SRI likely has 5% more downside. The ratio of NAV vs. CMI likely has…...
In a Down Market and in Only 10 Days, Our Long XLF, Short Regional Bank Spread Trade is up 400+ bps
Since October 5th when we suggested the possibility, the ratio of the KBW Regional Banking Index vs. the XLF financial ETF has declined 420 bps! In other words, our suggestion to long the XLF and short regional banks has generated…
Semis Likely Have More Relative & Absolute Downside Remaining
The chart below plots the ratio of the SOX vs. SPX. Note the ratio doesn’t reach intermediate-term support region (A) until ~3% lower. More material support doesn’t come into play until line (1), some ~15% lower. Additionally, the 52 week…...