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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: +20.03% We are currently above the S&P index by 24.56% |
| Market Action
Weekly Profit (P/L): 68 | | After a quick 500.00 in profit on an early sell-off the systems were actually off for most of the week while concentrating on some high priority items. The system was turned on after leaving an enormous amount of money on the table; however, turning on the system this late in the week allowed for a market to make an incredible move higher off of 1040 to close near 1065 giving the market a one day 2.5% move. We still ended up for the week but left over $1500 on the table. Needless to say the "subjective" rules have been clearly laid out, but turning off the system will not happen again unless there is significant reason to turn off the systems. Hedging rules have been finalized but the modeling of these new rules has not been completed.
For this last week the market had only thing to consider, will Ben Bernanke and 1040 hold up. Ben came through and 1040 held, the shorts were squeezed out and the market moved convincingly higher even in the face of Intel lowering expectations and GDP coming in revised nearly a full percentage point lower. However, when the FED says it will do everything to sustain the economy, it becomes difficult to imagine the US doing anything but spend our way out of this issue and clearly this is what the FED is going to do.
Look for a sell-off on Monday after the market digests the fact that Ben Bernanke and Intel actually stated "Things are not going as well as expected" and the market to recover as we hit the holiday weekend.
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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: Lets review last week's COT analysis:
A strong rally early in the week was wiped out on Thursday as the market didn't like the 500,000 in new jobless claims as well as a Philly Fed numbers that was negative. The short bias in the Pit traded contract has increased significantly this past week while the short term electronic has actually turned positive. It looks as though we might have another run to 1100 again in the short term, but longer term the market is expecting lower numbers at least through expiration in early September.
Our estimates that the market would test 1080 came to fruition and a subsequent test of 1040 came with a settle right about the middle. The market lost only about 1% for the week in light of terrible news. This market is completely dominated by professionals and hedgers, there is zero confidence in any number high or low that would make the market move in either direction for a sustained time frame.
This week we are showing a combined COT of electronic and PIT traded contracts which show the Professional traders are loading up on short positions in anticipation of a weaker 3rd and 4th quarter while the hedgers are about the same expecting poor performance as well. The contrarian small trader is LONG. We feel this week will test 1070 possibly 1080 then sell-off hard as the truth is digested and then slowly rally back.
We expect to see a lower market overall in the next couple months with snap-back rallies spread around.
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| A Little Exhausted
Not about Losses |  As we close out the first 6 months of active live trading (excluding our February test month) I have experienced the full gambit of emotions. You would think that trading with a software system would be less emotional, and while this is true for losses, there are now different emotions and feelings. Mostly, I am tired more than I was before. How can I fully trust the system when sleeping, or on vacation, or working on other items with higher priority? Testing is over, we have a proven system that will work, but the emotion of handling "money left on the table" has been much worse than losses. In fact, losses have become normal, but "money left on the table" is just a mistake that could have been prevented. In general, I am very satisfied with what has been created. Our tracking is about 40% above the S&P while actual trading is only 20%. This is completely related to having the system off at times when we should be moving forward. In fact, at times when I have become the most exhausted is when the markets and the system really deliver, like this past week. Additionally, the government is using their ability to provide "revisions" to cushion the blow and federal officials are just flat out lying or at best putting on a rosy picture. Corporations have been pretty clear though, the U.S. is not where they are making their money. Is the economy on the brink of collapse? I have no idea, but I do know that this is the new normal according to PIMCO and it will likely be like this for some time to come until there is some clarity from Washington D.C. about taxes, government spending, and the November elections. |
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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.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
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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