Interesting Trade

As I was reading a recent BCA Research report, an interesting trade caught my eye. The trade involves going long the Nasdaq (QQQQ) and short the Dow (DOG). As you can imagine, this trade has done quite well over the past couple of weeks, and it should continue as long as uncertainty remains in the financial sector. By going long the Nasdaq, you are essentially going long "non-financials," and by going short the Dow, you are shorting financials, or companies that are heavily tied to the financials. I am forecasting more pain for the banks, and maybe even nationalization of a select few. As for the Nasdaq, I see the smaller companies eventually leading us out of this downturn (if history repeats itself). Because this trade acts as a spread, the directional risk is hedged out. It protects you against any massive market moves, but has the potential to create a nice, low-volatility credit to your portfolio. Not to mention, if you're one of those tech bulls, this is a real safe way to play it!