Today we traded to new highs but closed negative on the day. The last 20 min we saw some profit taking moving the market lower.
I need to mention again that most player expect the market to move higher (VIX is really low – there is no fear) in the next weeks, however for some reason I don’t see it yet.
Caution at these levels is prudent and not initiating large new buys.
I have data that supports the QQQ becoming a bit more attractive that the SPY. This means that players are looking, and willing to take more risk on this market.
Since Jan 2013 it had paid off to by long SPY and Short QQQ however my data indicates that this trend is reversing.
The correlation it’s still really high over 0.8 most of the time measure in weekly bases.
Here is the correlation
As mention above, we did not close nicely and now I am happy I took some profits this morning. The TSLA trade made sense however the AAPL profit taker is contrary to the natural stock move. I will be analyzing to enter into AAPL with an option Spread with a better risk reward.