A regular situation that arises in markets looks like this:

Consider two markets with extremely high & #39;coincident movement& #39; [i.e They tend to move almost tick-for-tick but introduce any lag of note and one market has nothing to do with the other in a predictive context]

Now market A and B both have a relatively large move down [say], then & #39;something& #39; happens to de-couple the & #39;coincident movement& #39; between the two markets and market B then goes back to unchanged whilst market A stays weak.

A trader - for whatever reason - may expect;

a. The down move to continue
b. The reversionary play to unfold.

In the case of a. does she sell the weakest market [market A in the above example] or the strongest?
In the case of b. does she buy the market that has already started

its reversion [market B in the above example] or the market that stayed weak.

It& #39;s one of those situations where trader& #39;s instinct and & #39;what happened in the past& #39; are often at odds with one another.

In my experience, as with much else, the market rewards one strategy or the

other until conditions are just perfect for the & #39;Market God& #39; to smite everyone [at the very least the newcomers to the idea]