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Strategies & Market Trends : CFZ E-Wiggle Workspace -- Ignore unavailable to you. Want to Upgrade?

To: skinowski who wrote (9447)	11/26/2008 1:52:45 PM
From: Perspective	Read Replies (2) \| Respond to of 41414

LOL! Today's a great reminder of why one must cover all their bases when hedging. My DJIA and SPY hedges just aren't helping out at all, while every other thing on the planet is a rockin'! So much for "market neutral". This also answers a question I had about how the relative strength of the big caps could be reconciled with their need to do more downside work. It appears that the small caps may benefit the most from whatever rally we assemble going forward, while the big caps stall. Then, I expect that the big caps will fall hardest in the next decline. We may see a situation where a lot of Dow components hit fresh lows, while small caps merely retest. I'm reluctant to hang out in small caps during a bear. I figure that in any bounce, some money will at least flow to the big caps, and usually they will hold up relatively well in a decline. However, we may now have entered a phase where the declines happen hardest in big caps, and the bounces favor the small caps. So far it's just one data point. But the lesson remains: throw your net wide when you hedge. `BC