Has There Ever Been A Better Time To Be A Spread Trader?

The $SPY started the year at 125.75, and we are now trading at 134.50.  The market is up around 5% YTD and has taken the scenic route to get there.  The numbers below don’t do justice to the intra-month swings.  How confusing and convoluted has the rhetoric in the last year been?  How difficult has it been to pick a side with conviction?  The market is up but have the bulls really won?  Even though I believe we are in a tired bull market rather than a runaway bull market we are largely churning and will probably continue to churn and grind higher with big swings in between.  Trading spreads this year hasn’t been easy but I feel it has offered a larger margin of safety than pure directional trading.  Second half of 2009 and all of 2010 were not not great for spread traders.  If we get some volatility back in the markets, 2011 could go down as a great one.

Here are the monthly returns for $SPY:

January +2.3%

February +3.4%

March -0.4%

April +2.9%

May -1.0%

June +0.1%

July +0.4% (so far)

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