Long bias in the equity market, any selloff is short live

Two-day selloff is stopped by the strong job report. This is another evidence that news can always cause unpredictable outcomes. Last strong job report caused a selloff, this time comes with a strong rebound.

Anyway, our pairs trading model has been proved to be able to pick up the market directions. It promptly suggests to close the previous positions and open "long NDX and short Dow", or simply buy in SPX, or short VIX.

It's also very interesting that during the strong selloff, the previous "short NDX long Dow" still lost 20 bps, while short position in SPX gained 0.76% in 4 days.