An Arbitrage Strategy for Trading Indices By Scott Rothbort About this article: Several years ago, I sat down with James Altucher at a Barnes & Noble cafe and discussed some cluster arbitrage strategies I developed that would be suitable for large accounts or funds. For a few years, I traded several of these cluster arbitrages when I had customer demand. Perhaps that demand will return to LakeView Asset Management as investors seek less risky, transparent and unleveraged arbitrage strategies. Well, time has passed, and ETFs have become more prominent. My pattern-recognition skills, which I learned many years ago and discussed in this TheStreet University article, still keep my interest alive in developing these strategies. In the last few months, especially in the recent market downturn, I noticed somewhat parallel percentage moves in the S&P 500 (SPX) and Dow Jones Industrials (DJIA). Hence I decided to run a multiple regression of the SPX (as my "Y") and several indices... Or, call us at 1-866-321-TSCM (8726) Monday-Friday, 8 a.m.-6 p.m. ET. Outside the U.S. and in Canada, call 1-212-321-5200. More Stories From RealMoney Durable Goods Up Move Down the Tech Food Chain Jobless Claims Still High Bulls' Tenacity Is the Big Question Mark Should You Buy It? Pharmaceutical Product Development Bad News Trumps All Support for Banks Holds, For Now Bummer, Yields Are on the Rise Money on the Line Makes a Big Difference Structured Products: Unsafe at Any Price MORE STORIES FROM REALMONEY

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