On Friday I recommended buying 2 British Pound contracts verses selling 1 S&P 500 [mini]. The trend in the S&P 500 contract is still negative – shocking given how strong the market has been for the last week and 1/2.
The British Pound (BP) has bullish anchors and has lagged its primary anchor – the Euro:
Compared to the ES contract, Pounds were cheap:
This cheapness evaporated in one day so I recommended (this morning) to take the trade off as a spread . The underlying conditions however are still intact so the longer term models would still be short ES and long BP.
If there is a bounce in the spread then I’ll recommend it again.
