We have long warned about the collapse in traditional market neutral trading strategies which for the past decade provided a major portion of the moderate market liquidity, and whose participants offset at least to an extent the disastrous influence of the HFT self-fulfilling prophecy that drives fractal momentum to ridiculous levels and whips the market into an irrational, lemming-like frenzy based on microvolatility, until everything snaps. Furthermore, our observations of the deplorable performance of various MN indices and funds, confirms that between liquidations and capital losses, this investment category may be doomed. The second quarter report by the Friedberg Mercantile group confirms this observation: "We continue to experience problems with our equity hedge program, a market-neutral strategy applied to U.S. stocks. For many years a successful program, earning above-average returns that were totally uncorrelated to S&P 500 returns, the program has repeatedly disappointed us in the most recent past, losing money in each of the past five quarters. This persistence of unfavourable outcomes is a totally unique event in the 19-year history of the program... Structural changes such as the proliferation of exchange-traded funds and super-rapid computer-based bloc trading, activities that are totally unconcerned with valuation metrics and/or long-term trends, are still taking place and there is little or no prospect of this development coming to an early end." There is a massive shift going on behind the scenes in market structure, and it is now far too late for the SEC or really anyone to do anything about it now. We anticipate implied correlation to approach 1 quite soon as every trading day becomes a manic-depressive bout in which the last few remaining traders and algorithms push the market up and down by a thousand points as the market becomes nothing than a sleaazy, unregulated, second rate, back-door Atlantic City illegal gambling parlor with a few stripper poles on the side for the CNBC cheerleaders. The point being anyone who tells you they can predict any movement in stocks now that valuations play no role in asset prices, is a charlatan, an idiot, is selling a subscription to a newsletter, or all three. Full must read Friedberg observations below.
July 26th Update
Chart of GOLD for fun!
The chart below is of crude oil on a 20-year, monthly timeframe. It looks as if we are missing a corrective wave to the $55-65 area. Once oil trades around that level, I would love to invest in oil!
Three weeks ago, we made a recommendation of buying AMD in the low $7 range. It was trading for $7.20. Today is is trading at $7.80. Had you bought at the low, your gain would be 8.33%!
July 5th Update
The newsletter is in the form of a powerpoint presentation, it's the right below this sentence.. You can click on it, zoom, download, etc..
Enjoy and good luck all.
The answer to the riddle is 7 letters.
Good traders know that they're a _ _ _ _ _ er.
Read THE TICKER PG or think about what LVS is.
Natural Gas Newsletter
Enjoy and good luck all.
The answer to the riddle is 7 letters.
Good traders know that they're a _ _ _ _ _ er.
Read THE TICKER PG or think about what LVS is.
Natural Gas Newsletter
On July 6th, I noticed a VERY bullish pattern in AMD.
Wave 1 = clear 5 wave move up
wave 2 = clear zigzag abc
wave 3 = clear extended
wave 4 = clear flat
wave 5, should take us to $11-12
I doubt going long 100-1,000 shares would hurt your portfolio and may increase your sharpe ratio with an adequate stop at $6.85.
FROM THE NEWSLETTER, THESE ARE BETTER QUALITY CHARTS SO I AM POSTING THEM.
