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Hello and Welcome,
Welcome to the new Trizen Systems newsletter. This will be the new format for discussing our algorithmic trading systems and other information. Weekly updates will include Actual Profits/Losses, Commitment of Traders, Articles and Actual Trading screen shots. Pass this along to anyone that you feel would like to understand more about the financial markets, derivatives, and how to trade them successfully. Year to Date (YTD) Performance vs. the S&P 500:
Return on Initial Capital: +20.12% We are currently above the S&P index by 23.56% |
| Market Action
Weekly Profit (P/L): +$601 |  A difficult week to say the least and an extremely difficult two week period with the market in this last week having a 7% range down. The algorithm was in hedge mode as this market and the pundits have no clear view.
The numbers were of course bad. Though some bright spots exist for corporate earnings, the overall consumer just doesn't seem to be spending. Though a market can climb a wall of worry, it can't climb the wall of facts. Though this past week is typically a bad week according the stock trader's almanac it still simply didn't have any good data: Existing Home Sales are Down, New Home Sales are Down, FOMC Statement was less positive, Durable Orders are Down, Initial Jobless Claims are Up, GDP was revised Down and Michigan Sentiment was barely up.
Overall it was a bad news week all starting with a Yuan head fake. To use Cramer's words which I agree with, malaise has set in. 1040 is the magic number this week and if we close below this we could test 1000 or lower. But the game is still 1040, 1100, 1040, 1100 and now back to 1040.
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| Commitment of Traders
Bulls-n-Bears | | The COT, or Commitment of Traders, represents a government report that collects all the open positions for all traders in the futures market. It breaks it out into Hedgers, Professionals, and Small Traders. Hedgers maintain large portfolio positions and will hedge their positions using the S&P (so they can protect against falling markets). Professionals speculate and tend to be on the right side of the market opposite the hedgers. In most cases the Small trader (Green) is a contrarian indicator.
Analysis: Ouch, the small investor got crushed this last week while the professionals and hedgers went short. The game seems to be fading this week since there was no uptick with the professional "blue" traders which would signify that we will go back up to 1100. This week will likely touch 1040 and possibly break through. Our recommendation continues to be defensive.
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| The Next Great Depression
Modeling Demographics |  Listening to all the "experts" and reading all the newsletters you only need to ask one question: Does this person understand analytics and market activity? If the answer is no, then you can stop listening.
One person that I have been listening to for a while now (well, reading) is Harry Dent, author of The Next Great Depression. His background is simply modeling long term demographics and has modeled our current system dating back 500 years. His models aren't quarterly specific and are typically not yearly specific, he acknowledges this openly, but his accuracy from the 90's through this decade have been really shocking. His only gaff was calling DOW 40,000 and merely admits he got the top wrong but not the direction. Other than this, he has been spot on, especially when it comes to the recent recession. I also like the fact he goes over his miscalculations, but I haven't seen any misdirection just the actual quantity (i.e. Dow 14,000 vs. 40,000).
In summary he expects Depression Economics but also agrees with Friedman that something will have to happen globally over the next decade to handle our current demographic situation (Global consumption without preservation of resources will increase dramatically leading to conflict as well as entitilements that can't be supported by current working populations). The only reason I tend to agree with his assessment is the fact that he covers his model's output and works with other authors in discussing global trends. Just to clarify, he does expect things to be bad, but not as bad as 1930 since we have a much more global economy and he also expects our governments to avoid the pitfalls of the 1930's but he believes this shakeout period after the roaring 2000's is a natural progression of destructive creation. A good read on the stock market and its correlation to demographics around the world and how to play a deflationary economy. Which leads to the next question: Will we have inflation or deflation? No one can know for sure, but being prepared for a deflationary period is better than not being prepared. If you feel the pundits and "experts" all shouting inflation are just not seeing the whole picture, then this read is for you since it discusses all the missteps and bubbles throughout the last 500 years and open discusses what the next 100 years will likely entail. |
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Sincerely,
Edward Zaremba
Trizen Systems, Inc.
Commodity Trading Advisor
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| | BladeTrader Version 3.6 | | Version 3.6 and 3.3 have been released. We will have four accounts for each side and version and seperate percentages. |
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U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures, stocks or options on the same. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
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NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL, OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED WITHIN THIS SITE, SUPPORT AND TEXTS. OUR COURSE(S), PRODUCTS AND SERVICES SHOULD BE USED AS LEARNING AIDS ONLY AND SHOULD NOT BE USED TO INVEST REAL MONEY. IF YOU DECIDE TO INVEST REAL MONEY, ALL TRADING DECISIONS SHOULD BE YOUR OWN. |
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