Video

#SaxoStrats
Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Squawk / 17 November 2016 at 9:44 GMT
Hypothesis Testing
United Kingdom
Following yesterdays article;
https://www.tradingfloor.com/posts/quality-and-equality-8231626
I thought we should look at SP500 and Nasdaq(QQQ) and compare equally for relative strength weakness etc.
Note the chart showing which market is leading the other. Ignore the usdcad redline for the moment.
Also when looking for disparity in indices I have highlighted (grey arrow) a divergence which is as all option traders know max duress. When IV/IVR become stretched there are always opportunities to buy one and sell the other. In this case NASDAQ was inverse to sp500 so long the former and sell the latter. Even as a spot market trade on a 1:1 price structure (expensive) you would have gained approx +60 net from the NAS ! Or if you wanted to trade directionally with higher risk but less cost LONG NAS for the same result.

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