To Go Long or To Go Short?
There are several instances when a positive catalyst for one security can be a negative catalyst for another type of security. This can happen for many reasons, such as macroeconomic factors, competition, or intra market mechanics. Here are a few examples of inverse trade pairings.
Competition
These two are in the semiconductor space. This sector is in full rally mode, so going short on either of these names would seem irrational.
But these two names are in direct competition in the microprocessor market. This sometimes causes an inverse correlation in the price action of these two companies.
Most of the time, the majority of the semiconductor tickers travel in sentiment with one another. But when INTC or AMD have a new product release or a price change in their microprocessors, then it can cause an inverse reaction between the price action of these two equities.
Sometimes, it is smart to go long on AMD and short INTC, or vise versa.
Macroeconomics
Based on the forex pairing between gold and the US dollar, you will often see an inverse correlation in the price action of gold and the dolllar.
Currently, the economy is undergoing quantative tightening through interest rate hikes. This has brought up the dollar's value via increasing demand.
Eventually, the Fed will need to cut interest rates when the economy is showing signs of weakening. In theory, a weakening economy and quantative easing will bring down the dollar's value as well as add to the appeal of the safe haven status of gold.
When this happens, then it might be a good time to be long in gold and short the dollar.
Market Mechanics
Probably one of the easiest trade pairings is to be long the S&P 500 and short the VIX, or vise versa.
The VIX is the call to put ratio for the SPY. When investors are short the market and they hold more puts than calls, then VIX's value will be relatively high. Conversely, when traders hold more calls than puts then VIX's value will be relatively low.
Since October, the S&P has been rallying and the VIX is falling. This has been the perfect time to be long the market and short the VIX.
During a strong bear market or if there is ever an economic crash, then this might be the perfect time to go long on volatility and short on the market.
As always, this is not investment advice. Good luck trading. Be careful and be patient. Give your investments time. Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. And just follow the trends. A trend is your friend.
$Invesco QQQ Trust (QQQ.US)$ $iShares Russell 2000 ETF (IWM.US)$ $VIX Index Futures(DEC4) (VXmain.US)$ $SPDR S&P 500 ETF (SPY.US)$ $SPDR Dow Jones Industrial Average Trust (DIA.US)$ $Gold Futures(DEC4) (GCmain.US)$ $E-mini Dow Futures(DEC4) (YMmain.US)$ $E-mini S&P 500 Futures(DEC4) (ESmain.US)$ $E-mini NASDAQ 100 Futures(DEC4) (NQmain.US)$ $E-mini S&P MidCap 400 Futures(DEC4) (EMDmain.US)$ $E-mini Russell 2000 Index Futures(DEC4) (RTYmain.US)$ $CBOE Volatility S&P 500 Index (.VIX.US)$ $VIX Index Futures(DEC4) (VXmain.US)$
$USD (USDindex.FX)$ $Powershares Exchange Traded Fd Tst Db Us Dollar Index Bullish Fund Etf (UUP.US)$ $SPDR Gold ETF (GLD.US)$ $iShares Silver Trust (SLV.US)$ $Ishares Iboxx $ High Yield Corporate Bond Etf (HYG.US)$ $Ishares Iboxx $ Investment Grade Corporate Bond Etf (LQD.US)$ $iShares 20+ Year Treasury Bond ETF (TLT.US)$ $Crude Oil Futures(JAN5) (CLmain.US)$ $VanEck Gold Miners Equity ETF (GDX.US)$ $VanEck Junior Gold Miners ETF (GDXJ.US)$
$TENCENT (00700.HK)$ $SSE Composite Index (000001.SH)$ $CSI 300 Index (000300.SH)$ $CSI 300 Index (000300.SH)$ $FTSE Singapore Straits Time Index (.STI.SG)$ $NIO-SW (09866.HK)$ $NIO Inc. USD OV (NIO.SG)$ $NIO Inc (NIO.US)$ $BILIBILI-W (09626.HK)$ $Bilibili (BILI.US)$ $Baidu (BIDU.US)$ $BIDU-SW (09888.HK)$ $XPeng (XPEV.US)$ $Li Auto (LI.US)$ $BYD COMPANY (01211.HK)$ $BYD Company Limited (002594.SZ)$ $S&P/ASX 200 (.XJO.AU)$ $S&P/ASX 100 (.XTO.AU)$
$Chevron (CVX.US)$ $Phillips 66 (PSX.US)$ $Valero Energy (VLO.US)$ $Devon Energy (DVN.US)$ $Occidental Petroleum (OXY.US)$ $W&T Offshore (WTI.US)$ $United States Oil Fund LP (USO.US)$ $United Sts Brent Oil Fd Lp Unit (BNO.US)$ $Imperial Petroleum (IMPP.US)$ $Houston American Energy (HUSA.US)$ $Indonesia Energy (INDO.US)$ $BP PLC (BP.US)$ $Exxon Mobil (XOM.US)$
$Bitcoin (BTC.CC)$ $Ethereum (ETH.CC)$ $ETC (ETC.CC)$ $Yearn.finance (YFI.CC)$ $Terra (LUNA.CC)$ $Litecoin (LTC.CC)$ $Stellar (XLM.CC)$ $Cardano (ADA.CC)$ $Bitcoin SV (BSV.CC)$ $Bitcoin Cash (BCH.CC)$ $Compound (COMP.CC)$ $Polygon (MATIC.CC)$ $Dogecoin (DOGE.CC)$ $Metaverse ETP (ETP.CC)$ $Verge (XVG.CC)$ $Orchid (OXT.CC)$ $OMG Network (OMG.CC)$ $0x (ZRX.CC)$ $Qtum (QTUM.CC)$ $NEO (NEO.CC)$ $Dash (DASH.CC)$ $Theta Token (THETA.CC)$ $Tezos (XTZ.CC)$ $ZEC (ZEC.CC)$ $Maker (MKR.CC)$ $Decentraland (MANA.CC)$ $Cosmos (ATOM.CC)$ $ChainLink (LINK.CC)$ $Monero (XMR.CC)$ $TRON (TRX.CC)$ $Polkadot (DOT.CC)$ $XRP (XRP.CC)$ $Binance Coin (BNB.CC)$ $Bitcoin Gold (BTG.CC)$ $Uniswap (UNI.CC)$
$Communication Services Select Sector Index (.SIXC.US)$ $Technology Select Sector Index (.SIXT.US)$ $Energy Select Sector Index (.SIXE.US)$ $Consumer Discretionary Select Sector Index (.SIXY.US)$ $Materials Select Sector Index (.SIXB.US)$ $Health Select Sector Index (.SIXV.US)$ $Real Estate Select Sector Index (.SIXRE.US)$ $Financial Select Sector Index (.SIXM.US)$ $Consumer Staples Select Sector Index (.SIXR.US)$ $Utilities Select Sector Index (.SIXU.US)$ $Industrials Select Sector Index (.SIXI.US)$
$Direxion Daily CSI China Internet Index Bull 2x Shares ETF (CWEB.US)$ $China Alphadex First Trust (FCA.US)$ $Wisdomtree China Ex-State-Owned Enterprises Fund (CXSE.US)$ $S&P Asia 50 Index Ishares (AIA.US)$ $KRANESHARES SSE STAR MARKET 50 INDEX ETF (KSTR.US)$ $RAYLIANT QUANTAMENTAL CHINA EQUITY ETF (RAYC.US)$ $iShares China Large-Cap ETF (FXI.US)$ $Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR.US)$ $Franklin Templeton Etf Tr Ftse China Etf (FLCH.US)$ $db X-trackers Harvest CSI 500 China A-Shares Small Cap Fund (ASHS.US)$ $iShares MSCI China ETF (MCHI.US)$ $KraneShares CSI China Internet ETF (KWEB.US)$ $KRANESHARES CICC CHINA 5G AND SEMICONDUCTOR INDEX ETF (KFVG.US)$ $Global X Funds Global X Msci China Consumer Staples Etf (CHIS.US)$ $Global X FinTech Thematic ETF (FINX.US)$ $Global X MSCI China Industrials ETF (CHII.US)$ $Global X MSCI China Energy ETF (CHIE.US)$
$UK FTSE100 Index (.FTSE.GB)$ $German DAX30 Index (.GDAXI.DE)$ $Italy MIB Index (.FTMIB.IT)$ $Belgium BEL20 Index (.BEL20.BE)$ $Netherlands AEX Index (.AEX.NL)$ $Portugal PSI20 Index (.PSI20.PT)$ $Nasdaq Composite Index (.IXIC.US)$ $Dow Jones U.S. Index (.DJUS.US)$ $Dow Jones Industrial Average (.DJI.US)$ $S&P 500 Index (.SPX.US)$ $NASDAQ 100 Index (.NDX.US)$
$Activision Blizzard (ATVI.US)$ $UBISOFT ENTERTAINMENT UNSP ADR EACH REPR 1/5 ORD (UBSFY.US)$ $Sony (SONY.US)$ $Take-Two Interactive Software (TTWO.US)$ $Electronic Arts Inc (EA.US)$ $Microsoft (MSFT.US)$ $NetEase (NTES.US)$ $CD PROJEKT SA UNSPON ADS EACH REP 0.25 ORD SHS (OTGLY.US)$ $Roblox (RBLX.US)$ $Nintendo (ADR) (NTDOY.US)$ $Capcom (ADR) (CCOEY.US)$ $Square Enix Holdings (ADR) (SQNNY.US)$ $KONAMI GROUP CORPORATION UNSPON ADS EACH REP 1/2 ORD SHS (KONMY.US)$
$-1X SHORT VIX FUTURES ETF (SVIX.US)$ $ProShares Ultra VIX Short-Term Futures ETF (UVXY.US)$ $ProShares Short VIX Short-Term Futures ETF (SVXY.US)$ $2x Long VIX Futures ETF (UVIX.US)$ $DJIA Volatility (.VXD.US)$ $NASDAQ 100 Volatility (.VXN.US)$ $Cboe VXEEM Ask (.VAEEM.US)$ $Cboe Apple VIX (.VXAPL.US)$ $Cboe Amazon VIX (.VXAZN.US)$ $Cboe IBM VIX (.VXIBM.US)$ $Cboe Goldman Sachs VIX (.VXGS.US)$ $Cboe 20+ Year Treasury Bond ETF Volatility Index (.VXTLT.US)$ $Cboe Gold Volatility Index (.GVZ.US)$ $Cboe Crude Oil Volatility Index (.OVX.US)$ $S&P/ASX 200 VIX Index (.XVI.AU)$ $HSI Volatility Index (800125.HK)$
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72981367 : Do more
Cutieshark : Thank you. This post is great
DwightSJacob : Pairing now trade
Ursery Cutieshark : Thank you peoples
r1cky : W
SpyderCall OP Cutieshark : Thanks. I appreciate that.
SpyderCall OP 72981367 : You mean more inverse trade pairings?
SpyderCall OP 72981367 : just off of the top of my head, I have seen news headlines in the transportation sector effect shipping companies share prices inversly. Specifically $FedEx (FDX.US)$ and $United Parcel Service (UPS.US)$. Sometimes $Amazon (AMZN.US)$ gets thrown in the mix as well. But FedEx and UPS are the two major players in their realm of the transportation space so sometimes you get an inverse reaction between these two. I should mention that a lot of the time these names will move in the same direction though. So any divergence in the price action of these two will be short live every time it happens.
Giovanni Ayala :
jaminur : @In One Chart
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