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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. Bi-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.
Feb 1, 2010 to Date (start) Performance vs. the S&P 500:
Return on Initial Capital: +37.65% We are currently above the S&P index by 22.49% |
| Market Action
Bi-Weekly Profit (P/L): $1400 | |
2011 got off with a quick start and though it stalled shortly after the new year, we were able to gain over the S&P 500 with minor outperformance. We are still on March 1, 2010 to Date performance metrics and will not start the performance measurements until that time. There is no where to put money other than equities and money managers can't simply track the S&P, they have to leverage their portfolios as individuals and others ask for more return than the risk free rate (treasuries, CD's, etc) of return which has been pitiful. Look for the market to continue pushing higher as the world grows accustomed to "Euro-zone" issues and simply moves on.
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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 the prior COT analysis:
"The market settled at 1257 for the year, a nearly 13% move helped in large part by the Federal Reserve's continuous assistance to the economy. A truly dynamic issue unfolded this last week as the professionals that were long literally sold out of their positions and are basically net neutral. Professional hedgers offset as well. What does this mean for the next two weeks? With a Non-Farm payrolls report due this week, it could be an early sign for the market to have a normal pull back; we will know more on Tuesday to get a look at this past week's COT. A hedge in this early stage would be wise."
An amazing turn here in the COT as hedgers in the electronic contract turn south and professionals turn North. The small investor is short (typically wrong). This is a classic pattern for a bullish tendency; however, this past year has been one of divergence. In prior COT's this is a bullish pattern but if the hedger AND the professional go short, look out below. For now though, most signals are higher though the Stock Trader's almanac does show some weakness after earnings season.
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| 2011
Matching the Index | |
 Money managers absolutely CANNOT simply match the index as they did last year. This was largely because they were not using much leverage. If a money manager is simply matching the return of the S&P, the individual should just by an S&P 500 ETF and ride it out. So, for 2011, look for money managers to put on more leverage as they attempt to beat the market. This also sets up for some disappointment once everyone is fully invested which might take us through the summer. I would definitely expect some volatility to coincice with a eurozone failure along with summer duldurms and have another run-up into 2012. My prediections for the market are largely a week out, but I will throw my vote out for a 10% move in the S&P 500 for 2012.
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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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