We went for the 875/885 on the RUT this month for a couple of reasons. First, we’re again able to get a spread above the all-time high. Secondly, the RUT was offering a nice premium above and beyond the SPX. The worst times to be in a RUT spread are when you’re expecting a wave 3 up. It’s possible we may get one this cycle, but we rank it as a lower probability and if we do, it should be of a lesser degree. The SPX faces large resistance is the 1420-1430 area if we continue moving up here, but we’re even doubtful about that happening given the Chairman’s speech yesterday and we could be starting the ‘sell in May’ syndrome. Too early to say yet. There’s no question the market is impulsing upwards, but the big question is it really an impulsive wave? There’s a big distinction between the two and we should see soon enough
ABOUT US
Mario Randholm Blog. Mario is the founder of Randholm & Co. S.A.C., an investment management company dedicated to producing superior returns for its clients and employees by adhering to mathematical and statistical methods.