January OPEX tomorrow and the S&P at 1484. Looking back at the previous post I would actually ride this rally a bit further considering the latest central bank news, the more nuanced FED ending QE-talk, the overall decent earnings and general (still) tendency to very quickly take profits, hedge, be under weighted, whatever.
I think my strongest calls on 1) low volatility / sell volatility on spikes, and 2) short commodities vs equities, still are the place to be. Looking at individual equity names there has been huge rallies in the most shorted stocks lately. They are mostly still awful businesses so the upcoming short opportunity will not be in the major indexes but in individual names. I am preparing a basket of shorts against the market to be entered gradually as the market will be topping out/drifting sideways during the period starting february and forward. I will then also try a short basket of commodities against equities, although the hedge will not be 1:1 since I also believe there will be a decline in equities in absolute terms but not in relative terms.
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