Go with Strong Daily Trends for Short-Term Profits

The S&P 500 is down about 10% in past three weeks and volatility has been off the charts.

How do traders make money in this extreme volatility?

#-ad_banner-#If you read our last article in regard to shorting the financial sector (XLF) and going long the technology sector (XLK), over the past weekend, you outperformed the market by a wide margin.  Our readers made 3% to 5% in a 1 to 2 day time frame. 

It’s called “pair trading” — entering a long position in one investment while simultaneously shorting a different investment. To make money, the investment you’re long must outperform the one you short.

I see a similar pair trade opportunity to enter today. This time we are going long financials (XLF) and shorting technology (XLK). 

We are looking to enter this trade for a 2% to 3% gain. We would exit this trade by the end of the week.

Visit TheChartLab.com for my latest market calls.