Market view: Peak or Continuing

The S&P 500 Index has increased over 1% since we traded positions of long in NASDAQ 100 and short in Dow Jones Industry Avg in the morning on April 30. As we pointed out in other post, the signal suggested the US equity market would go up. The performance of equity indexes since then has confirmed the market direction.

Now that the S&P 500 Index is hanging on the all-time high level, will this be the peak or the up trend will continue?

Even though the equity market is up since we openned the long/short future positions, the P&L of the trade is still negative, which implies that growth stocks have underperformed value stocks in May so far. The status of the index pairs trading model suggests that US equity market will keep going up until the model tells us to long Dow Jones Industry Avg Index and short NASDAQ 100 Index.