> We this that if JPM rises higher than XLF then it will soon revert and trade lower shortly. Likewise, if JPM falls lower than XLF then we think it will soon trade higher.
XLF is a financial sector ETF. JPM is a huge bank. If JPM does badly, XLF should probably do badly, and vice versa. Then it stands to reason that if JPM falls below XLF, it will soon go back up to where XLF is. This is relative, so the same situation with XLF rising above JPM, and JPM catching up/XLF falling back down, and similar situations.
Thanks! I know it may seem obvious to people clued up on this stuff but it's basically a dark art to me. I appreciate the comment