Just because I sold doesn't make me bearish

And now I'm more bullish on SPX than NDX. HOWEVER, Gold is trying to form a top here, so I don't see much action in equities for a while. In fact, I expect gold to go slightly higher while equities to go slightly lower, until gold is ready for the mother of all declines. Since there's not really any new money coming into the market, it will have to come from commodities. Since commodities are not ready to dump until I short gold big time, we still have about a week of choppy sideways action before its ripe.

who props up spx's outperformance when commodity-correlated stocks nosedive? financials? consumer? biotech?? precious metals miners are already trading in lockstep with gold/inversely with USD. I am genuinely curious. I still think high beta tech leads us up. just look at the whales chasing SOX this past week now that AMAT's dabbling in solar panels... outside of select builders, cap goods/infastructure, and transports there do not strike me as all that many alpha-generating names in this spx crowd.

My bullish call on SPX is purely based on relative strength between SPX and NDX. For short term, NDX relative strength has outpaced SPX by quite a bit. I dunno what logic will lead it. All I know is it seems stretched. The same system that told me to buy NDX yesterday and told me to get out today, well it also told me to buy SPX, but it gave me a longer time frame.. and it still hasn't given a sell signal, so technically, it still has about 80% chance of being profitable.. for like 1.5% average gain from yesterday's close.

fair enough. I am not as keen on micromanaging myself into triggering taxable event after taxable event, so I tend to just sit tight through these little 10-20 pt hiccups unless I am actively scalping. we should always be guided by the longer timeframe, which is why I am particularly encouraged by what I am seeing in the vol space. cheapening/declining vol in an environment like this makes me start to think risk is nearing the point where it is appropriately repriced, which means all the toes that start testing the water might be able to buoy the water level a little more than 150 bps...

Edited by MacRo, 10 April 2008 - 10:56 PM.

Volatility is getting to a point where micro managing won't be profitable.. but I would like to see it clearly broken before I park it and ride it..

Edited by dcengr, 10 April 2008 - 11:32 PM.

as you point out, we have ourselves a weekly breakdown if today's market action can't deliver quite a spike.