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
RUT vs SPX
Started by
89S10
, Nov 06 2007 01:29 PM
2 replies to this topic
#1
Posted 06 November 2007 - 01:29 PM
#2
Posted 06 November 2007 - 03:51 PM
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.
Mark S Young
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#3
Posted 06 November 2007 - 04:18 PM
The cycles average about seven years, so there could be many more years of poor relative performance for the RUT.