A guest columnist submission courtesy of Rareview Macro

Monday Oct 7 2013

Macro:  Long Japan Nikkei after a 6% correction and German DAX against short US S&P 500 allow one to participate in further international equity appreciation should the US Dollar weaken further. This also protects the downside in case there is a short-term sentiment shift away from economic improvement as investors are less willing to look through the issues in Washington. Ahead of Government resolution the stop level for S&P 500 is ~1705 and should trigger an immediate reversal to a long US Equity position. After generating positive performance from the relative value position initially this will then increase ones global beta exposure allowing full participation in the expected strong demand for US equities into year end. The sizing of this strategy should be consistent with trying to capture a significant amount of a 5-7% global equity index rally from current levels. Continue reading →