This is a closer look at the difference in daily % price gain or loss for SPY versus Mosaic and it gives a picture of how the dynamic portfolio controls volatility. This chart only extends over the last year and, as you might expect, the SPY gets a whole lot wilder as the time frame expands but Mosaic just keeps plugging along in the same narrow range band. What we’re not looking at here is the difference in slope of the RSQs (mentioned last week) which would display the market neutral advantage even more clearly. With the recent parallel price alignment of both bonds and equities the market neutral % Flux has gone almost flat line while the SPY continues to range. At midday (Thursday) we’re starting to see a breakdown of the bond/equity alignment but it’s not at all clear which way it will break. GE’s earnings tomorrow pre-open will probably provide the juice for a clearer picture.