2 replies to this topic

[89S10]

I got of my long SPX short RUT in the futures market. The reasons were a few: (1) made three percentage points of relative performance (2) approaching the end of the year and it could bite me short term (3) the target was 0.51; I got out at just above 0.52 (4) want to enjoy the holidays (5) chatter on this board suggests the possibility of a Santa Claus rally (6) historically, small caps have done better at the end of the year

[OEXCHAOS]

Nice, well considered trade. I am thinking that the RUT is likely to undergo a long, long period of underperformance. In fact, if I were more Bearish, I'd say it was likely to be entering the like of a 1972 type Bear Market. But I'm not. I'm just relatively Bearish on this index. Of course, it's going to be tough, without the uptick rule. I think we'll have to trade this one if we're going to short.

[89S10]

The cycles average about seven years, so there could be many more years of poor relative performance for the RUT.