Is this the UK domestic Trade to now take?

Is this the UK domestic Macro Trade to now take?

This could be "the play" in times of uncertainty (think 2007 - 09)

Long FTSE100/Short FTSE250

BLUE CHIPS v Mid Caps

and the FTSE250 chart for some more perspective..

The FTSE100 is obviously looking weak too - but I think it will relatively outperform the FTSE250 over coming months.


A quick note on the UK market - There is no getting away from it. The UK stock market is now vulnerable to going lower. The current cycle since the 2009 financial lows is now long in the tooth and the yellow arrow shows where we could be compared to previous Macro cycles. This model uses two smoothing averages (a short term and medium term) to take away the noise of daily fluctuations. The real danger here is that everybody who believes the UK has committed economic suicide rushes out and sells their stock holdings creating a self fulfilling wave of selling and lower we go. This can then have a negative feedback to the actual companies being sold adding to additional problems. Whatever happens, expect greater daily ranges like in 2008 and hopefully it won't get too bad for the averagae citizen.

If I understand it right, the FTSE100 has about one third of its capitalisation earned from economic performance outside the UK, the FTSE250 is almost 100% UK-based. So your idea is interesting and may have logic behind it. I hope this nice approach works out.

Yes tomorton indeed plus larger Blue Chips should be favored over smaller mid-caps in times of uncertainty - which I think describes what the UK economy and stock market will experience over coming weeks and months. In other words this is a flight to quality/safety trade.