Most of the prior two weeks had the market rallying to 1230 with a subsequent sell-off which triggered our short strategies.  We liquidated the majority of our options holding and moved into futures trading.

The market is literally waiting for Europe's Lehman moment and as such the market is pricing in a European banking crisis.  In the short term we expect little from Obama's speech and many more issues to surface as the markets tests 2011 lows (1080). 

Its tough out there.  The labor market showed no jobs created in August--not surprising.  This was exactly the same condition as last summer; however, this time, there will likely be little in the way of monetary policy (FED/FOMC) support and fiscal policy via Obama doesn't even show up on the radar. 

The market has no clarity on Europe, the job market is dismal, and the economy is puttering along.  Lets give a case for the bears:  There are too many problems to list to be positive about the stock market, poor jobs, bad economy, pessimistic consumers, pessimistic small business owners, indecisive congress, European meltdown, Euro breakup rumors.  The list is endless.

Now a case for the Bulls:  Earnings season is several weeks away, and expectations are really low.  The FED QE2 was pulled and the economy is "soft" but not on life support any longer, i.e. the patient is breathing on their own.  Housing seems to be nearing a bottom, the stock market seems to be holding on to 1100, America's banking system is thin and lean as is corporate america, and unemployment is going to be 9% because corporations just don't need to hire due to their massive amount of efficiency gained in the last 4 years and the consumer is not dead, Americans continue to spend, but are much wiser on their balance sheets as they become less levered.

Overall, this looks a lot like summer of 2010, and the malls, grocery stores, and other places have been packed.  The new norm is this:  9% unemployment, a deleveraging over the next 5-10 years (for governments and indidivuals) and a housing market that will find a bottom and return to 1% appreciation in the next couple years.

 Basically, the entire year was spent rebuilding and automating every aspect of the system (excluding the options) so we can open accounts without massive amounts of effort monitoring every account.  The response has been great, so much so, that I had to rethink our system and prepare for much more automated handling of all the accounts. 

It was an unfortunate delay, we missed some great opportunities over the last six months, and we are at +0.40% for the year instead of +10.00% but this was the time to get everything together in preparation for much bigger things and we are above the S&P by nearly 10%.  I am really happy to have finally gotten Version 4.0 out the door, I have some additional live testing to do this week, but the peformance has exceeded my own expectations. 

We have scheduled an informal lunch and presentation for this saturday for 10-15 individuals to discuss managed futures and seats filled up quick.  Plans for another presentation are being made and I will have some information as we get there.