Seems like a very good R:R trade. YTD GLD-SPY has looked very good. Gold has been squeezing shorts since that large push up at the end of January. This wash out is probably healthy if anything! Plus gold just freshly broke its previous downtrend while equities have been grinding higher for a while. I like it and will be watching it next week
some interesting content for you spreaders: http://vixandmore.blogspot.com/2012/02/slaying-natural-gas-contango-dragon.html
Essentially what this ETF allows you to do is to actually "own" gold. What I mean by that is a lot of people think if they buy gold whether it be the bullion, the futures or ETF, they think they are buying gold. They are not. What they are buying is a risk asset. A risk asset that will drop in price with the S&P more often then not. By spreading gold against the S&P, they are actually focusing specifically on the relationship Gold has with the rest of the market, not as a risk asset.
was thinking what is the most outlandish counter intuitive spread. I came up with short aapl long ung, Mav would you like to shred this one?
Here is a chart of that spread. This is also why there is a chronic weakness in WTI right now for those of you wondering why oil can't catch a bid with the ES so strong.
We confirmed the monthly A down today. I will not do anything in this till it trades back above the monthly A down.