Update: ACE Limited (ACE) vs The Chubb Corporation (CB)

This trade was a total dud.  $ACE$CB has gone from one of the most reliable spreads to one of the worst over the last year.  Completely lost the elasticity and rapid reversion it once had.  I warned against $ACE making a new 52-week low without $CB$ACE made a new low in early October and the spread has been stuck on the low side of the range ever since.  In my view this spread needs to make another move, either lower or to the top of the range before it represents another tradable opportunity.

Earnings are around the corner (Thursday) and I hate it when spreads flat-line at two standard deviations into earnings.  It can’t mean anything good.


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