'There's no retail inflows. The hedge fund community has derisked. So the algorithm based, high frequency traders have taken up the slack, and are now responsible for 70% of the total trading activity in the market every day. It's a very difficult environment to create alpha, or excess returns in. Are your clients frustrated?
Featured Trades: (BUY THE DIP IN CORN), (CORN), (DBA), (JJG) 1) Buy the Dip in Corn. The US Department of Agriculture released its monthly crop report on Monday, underlining the tremendously bullish conditions for corn, which I have been harping away about in this letter for months. What did the markets do? They sold off,
Featured Trades: (SELLING OIL AGAIN FOR A HEDGE), (USO) 2) Selling Oil Again for a Hedge. With oil having bounced $5.50 over the last couple of days, I am going to flip back to the short side for several reasons, not all of which have to do with Texas tea. The trigger was oil's failure
Featured Trades: (TRADING SHIFTS TO THE FOREIGN EXCHANGE MARKET) 2) Trading Shifts to the Forex Market. Those of us who have been in the business for four decades have been overwhelmed by the growth of the foreign exchange business. Since the late sixties, it has grown from a handful of low level clerks speaking on
Featured Trades: (WHAT'S ON THE MENU?) (FXE), (EURO), (UUP), (GLD) 4) What's On the Menu? I am posting these charts below from a variety of sources outlining some trades that I may execute in the near future. Call it my 'short watch list'. Look at the two longer term charts for gold, which seems
Featured Trades: (MY TAKE ON THE 2012 PRESIDENTIAL ELECTION) 1) My Take on the 2012 Presidential Election. As I write this, I am sitting at the San Francisco consulate of the People's Republic of China, awaiting the issuance of my business visa. Since I will soon be in the neighborhood, I plan to interview some
'An employer now has access to, not only cheap software, cheap automation, cheap robots, cheap labor, but cheap genius as well,' said Tom Friedman, a columnist for the New York Times.
'For the last 20 years we used to trade inside a trend. There's no trend anymore. The day to day trade right now is what is the soup du jour, what is the trade of the day,' said Scott Bauer, a floor trader on the Chicago Mercantile Exchange.
Featured Trades: (WHY I COVERED MY GOLD SHORT), (GLD) 1) Why I Covered My Gold Short. I have to tell you that I was just not feeling the love from my gold short when I came into the office Wednesday morning. You would have thought that, with a double top on the charts in
Featured Trades: (HEDGE FUNDS RAMP UP MARKET SHORTS), (SPX), (SPY) 2) Hedge Funds Ramp Up Market Shorts. Hedge funds have gotten much more aggressive on the short side, as recent data show, with enviable results. According to Data Explorers, and independent research boutique, emboldened market timers and macro players increased their shorts in industrial stocks
