Monthly Archives: October 2012

Managed Futures Funds Are Scared of Commodities

There has been a tendency recently of large managed futures funds reducing their exposure to traditional commodities because of their higher volatility while increasing their exposure to stock index, fixed income and currency futures. This may end up being good for stocks … Continue reading

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Systematic Stock Index Trend Followers Are An Easy Prey

The dynamics of stock indices have changed notably since the fall of 2008. Trend volatility has increased substantially. Systematic trend followers, i.e. fund managers and traders who employ mechanical systems that attempt to follow the trend have been unable to … Continue reading

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Market in the Last Stages of Preparing For a Strong Rebound

The market is in the last stages of preparing for a strong rebound to squeeze out shorts. It should be clear that in a market with low retail participation most of the profits made by the professionals and algo bots come from … Continue reading

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The Fallacy of Rare Events and Fat Tails

Rare events such as the 1987 stock market crash or the Google stock drop of last Friday are unpredictable. Those who try to convince investors and traders to constantly plan for such events essentially attempt to neutralize them and turn them into spectators … Continue reading

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Commodity Futures Trend-followers Should Adapt to New Market Realities

You can’t just trade the markets in 2012 with systems developed based on models conceived in the 1980s and 1990s. The markets have changed a lot since then. You can’t just rely on  traditional trend-following systems to catch trends. You have … Continue reading

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Investors in Shipping Stocks Defiant of Shipping Fundamentals

It could be that investors in shipping stocks either do not understand the market they are dealing with or they know something that the rest do not. In my opinion the former is the case. As I show in this … Continue reading

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