Trade Idea: Buy XLV and Short MRK

One cool feature that thinkorswim offers is the ability to pull up pairs charts. We'll use the daily spread chart of XLV-MRK to show this potential spread trade. Here it is:This chart represents the spread between XLV and MRK...as the price rises, that indicates that XLV is stronger relative to MRK and vice versa for the downside. As you can see from the chart, it appears that XLV bottomed and MRK topped back in January and now XLV is getting stronger relative to MRK. Right now the spread is roughly at -3 (XLV's price is $30.38 and MRK is 33.31). From this chart, I've set a price target of +1 spread...XLV would rise and MRK would continue to fall.

I've been tracking and playing with spread trades like this..especially trading single stocks against their sector etfs. This potential trade is standing out to me right now and I though it would be worth sharing.

TLT