Another week, another hit to the SPY but our RYDEX workhorse has so far weathered the storm. I’ve added a line to reflect relative gains over the past 5 days as well as the usual tracking metrics. Traditional risk management models used by many money managers hold 60% stocks & 40% bonds but using RYDEX funds and their inherent leverage skews allows nuancing such an approach to produce a better market neutral balance. I’ve also shown a chart of the “Risk Spread” and the TrendX momentum signal. The Risk Spread is looking at the attractiveness of a short term “risk on” vs. “risk off” position. And the reason this is useful information is in timing new allocations of capital into the model. Ideal risk off situations typically set up after a zero line cross to the upside of both indicators…a situation that is not imminent.