Dozu, not sure who's idea your criticizing...but I've make points every month trading the strat I layed out. The trick of it is timing though...just because the S&P is trading very weak to the DOW, doesn't mean when, or how much, or how long, the market will fall.
You need to watch it over time...develop a feel, see what it looks like, etc.
It mearly gives a very good indication of future direction. Magnitude, timing, stops...when to exit the trade, etc...these take finesse. It is a discretionary trade... and profitable discretion takes experience.
However, the Arb strat, I honestly don't know. i tend never to dismiss anything based on it's simplicity, or degree of obviousness, but on my own independent research.
One could argue buying when the trend is up is too "obvious"... but I think most of us know trend following can be very profitable...etc.
Greg
