The Macro Trader Equity Risk Index
This week The Macro Trader equity risk index climbed from 11.11% to 22.22%. As great as a jump like this looks it is still quite bearish as the index goes from 0% which is very bearish to 100% which is very bullish. In a regular bull market it will usually be in the 65-85% range. As you can see in the chart below during an insane bear market it tends to hang out in the 30% and below range.
macrotrader.com/2009/03/10/the-macro-trader-equity-risk-index/risk-index-2/” rel=”attachment wp-att-169″>
As this is being posted Tuesday afternoon you have likely seen the huge rally we had today with the SP500 up over 6% in one day. While this will likely have everyone on bubblevision (CNBC) calling a bottom and telling us to be buying up everything we can, we take the view that in a bear market rallies are made to be shorted. In our weekly newsletter The Macro Trader we have taken a few very small long positions but are expecting a multi-day rally that will likely give us several good shorting opportunities. We are in a bear market, the domestic economy is in a recession, and the global economy is in a recession. Until we see evidence to the contrary the primary trend is down and that is where investors should be spending most of their efforts.
Happy Trading,
The Macro Trader
Dave@TheMacroTrader.com
P.S.If you are interested in learning more about Macro Trading sign up for our FREE Macro Trading 101 course in the box below.
P.S. Over the weekend we launched out membership site and are excited for the additional coverage and education that we can now offer our subscribers.
