The things that keep me nervous about the scenario that I outlined are the changing credit ratings that could be a catalyst for much greater sub prime and Alt A pain. Escalation of the Iran Uk affair though I think this is low probability as it is not in the dominant players (west) interest. Continued Yen strength. Regulatory action by China that will hit their market which in turn could impact ours. The chart pattern from 87, and the ones that I think Bylo posted from the 60's which such high correlations to this last years move. If the correlation holds up then it is down from here.
My strategy specifically is long NQ futures as a core position (mostly because there is record short interest right now) trying to occasionally trade the dow mini futures on retracements intra day. Long calls on the Yen future (as a hedge against a strong move in the yen which will hopefully offset potential NQ losses from liquidity loss from carry trade unwinding), long 10 yr futures (short 10 yr calls) these should move if the market does take a hit and if we do rally big then the calls should mitigate some of the losses on the futures. Long a small number of oil futures in case the Iran situation flares which i will use as a buying op for more NQ. Long (EEM, CFC, Rimm, CC, BBY) puts, Goog calls.
My strategy specifically is long NQ futures as a core position (mostly because there is record short interest right now) trying to occasionally trade the dow mini futures on retracements intra day. Long calls on the Yen future (as a hedge against a strong move in the yen which will hopefully offset potential NQ losses from liquidity loss from carry trade unwinding), long 10 yr futures (short 10 yr calls) these should move if the market does take a hit and if we do rally big then the calls should mitigate some of the losses on the futures. Long a small number of oil futures in case the Iran situation flares which i will use as a buying op for more NQ. Long (EEM, CFC, Rimm, CC, BBY) puts, Goog calls.