Trade Idea: Exxon Mobil Corporation (XOM) vs. Chevron Corp. (CVX)

It doesn’t get any sweeter than this.  It’s almost too good to be true, which makes me nervous.  This is the white elephant spread that everyone wishes they could trade consistently well because of its unlimited liquidity.  It is very rare that the spread will push out far enough to give an opportunity to establish a positional type trade.

The trade is long $XOM and short $CVX using 1.4 : 1 ratio.

Warning, this spread is very slow and plodding and will test your patience.  It can also slowly drown you as it moves against you, putting you deeper and deeper underwater each day.  I will watch it this week and see how it plays out.  One concern I have is that the long term chart of $XOM is broken compared to $CVX.


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