Pair trade opportunity with SPY and VT
Here is a 25 year price chart of SP500 with the NYSE composite in purple as a comparison. At each peak there is a significant percentage divergence in prices between the two. Additionally after a subsequent decline in prices the two indices converge in price showing a collapse of the divergence. In the current cycle the SP500 is ahead of the NYSE by approx 24%. SPY and VT are good proxies for SP500 and NYSE composite respectively. Short SPY and long VT in equal dollar values. This might take a couple of years to play out so patience and caution (small position) are warranted.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.