The publication for trading and investment professionals

eNewsletter

29 April 2013

Long-term chart suggests top in US stocks

A new report from Colby Asset Management suggests that US stocks may be reaching a top based on a long-term chart of the Wilshire 5000 going back to 2000. The research suggests that the formation of a bearish reversal pattern has been confirmed by three successively higher tops in the index coupled with two significant lower lows. Colby says that the pattern is typical in markets during the final speculative phase of a long-term bull market. (See Chart 1 below).

The Colby report is supported by the latest Big Money poll of professional investors from Barron’s magazine which shows bullishness at an all-time high of 74%. The latest Barron’s magazine cover (“Dow: 16,000”) follows similar covers in 2000 (“Still Bullish”) and 2007 (“Dow: 14,000”) published shortly before huge falls in the index confirming the magazine’s reputation as a reliable contrarian indicator of stock market sentiment. (See Chart 2 below).

Click on thumbnails below for Chart 1 and Chart 2.

Look for underperforming money managers says Nicola Horlick

Speaking at a recent behavioural finance forum in London, Nicola Horlick of Rockpool Investments recommended a contrarian strategy of investing with those fund managers and hedge funds that have good reputations but have recently underperformed.

Describing real investment returns over the past 14 years as ‘diabolical’, Horlick explained that the tendency of investors to herd leads to funds flowing towards those managers with the best recent record. However, because so few managers are consistently successful, these managers are more likely to go on to underperform. As such, she suggests targeting those managers who have performed less well in recent years as they can be more relied upon to outperform going forward.

See webcast >

THE TECHNICAL ANALYST
AWARDS 2013

During a packed black-tie dinner at the Le Meridien Piccadilly Hotel in central London on April 18, guests learned the winners and runners-up from compere Trevor Neil.

The Technical Analyst awards this year saw a record number of nominations, with over 300 entries across the 19 categories. The nominations were subsequently shortlisted to 72 finalists, comprising leading investment banks, software companies and research houses.

In the bank research categories, UBS, Credit Suisse and RBC dominated the honours. Our judges gave UBS two awards including Best Bank Equity Research & Strategy (Peter Lee, UBS Wealth Management) along with Best Bank Fixed Income Research & Strategy (Richard Adcock, UBS London) for the third time.

George Davis of RBC Capital Markets in Montreal took three awards: Best Bank FX and Best Emerging Markets Research and Strategy, and Technical Analyst of the Year.

Bloomberg took two awards: Best Data Provider (4th year) and for the first time, Best Technical Analysis Platform.

Full details can be found on our website.

Research & Strategy Finalists:

BEST BANK EQUITY RESEARCH & STRATEGY
BNP Paribas
JP Morgan
Piper Jaffray & Co
PrinceRidge
RBC Capital Markets
UBS
WINNER: UBS (Peter Lee, Wealth Management Research)
RUNNER-UP: JP Morgan Equity Quant Research

BEST BANK FX RESEARCH & STRATEGY
Citi
Commerzbank
Credit Suisse
JP Morgan
Lloyds Bank
RBC Capital Markets
UBS
WINNER: RBC Capital Markets (George Davis, Chief Technical Analyst, Fixed Income & Currency Strategy)
RUNNER-UP: Commerzbank

BEST BANK FIXED INCOME RESEARCH & STRATEGY
Bank of America Merrill Lynch
Citi
Credit Suisse
RBC Capital Markets
Royal Bank of Scotland
UBS
WINNER:UBS (Richard Adcock, Head of Global FICC Technical Strategy)
RUNNER-UP: RBC Capital Markets

BEST COMMODITIES, ENERGY & POWER RESEARCH & STRATEGY
Bank of America Merrill Lynch
Credit Suisse
FuturesTechs
Sunrise Brokers
Thomson Reuters
United-ICAP
WINNER: Credit Suisse
RUNNER-UP: United-ICAP

BEST EMERGING MARKETS RESEARCH & STRATEGY
ANZ
CLSA
Informa Global Markets
Lloyds Bank
MTS Research
RBC Capital Markets
WINNER: RBC Capital Markets (George Davis, Chief Technical Analyst, Fixed Income & Currency Strategy)
RUNNER-UP: MTS Research

BEST STOCKBROKER RESEARCH & STRATEGY
Auerbach Grayson & Co.
Aviate Global
Mirabaud Securities
Panmure Gordon & Co
Redburn Partners
Strategas Research Partners
Sunrise Brokers
WINNER: Aviate Global (Riccardo Ronco, Head of Technical Analysis)
RUNNER-UP: Strategas Research Partners

BEST INDEPENDENT RESEARCH HOUSE FOR EQUITIES
BBSP
Informa Global Markets
Lowry Research
S&P Capital IQ
Stone & McCarthy Research Associates
Trading Central
WINNER: BBSP (Jean-Charles Gand, Senior Technical Strategist)
RUNNER-UP: Lowry Research

BEST INDEPENDENT RESEARCH HOUSE FOR FX
3cAnalysis
4CAST
Informa Global Markets
Market Chartist
MNI
RW Market Advisory
Trading Central
WINNER: Informa Global Markets (Martin Jones, Chief European Technical Analyst)
RUNNER-UP: RW Market Advisory

BEST INDEPENDENT RESEARCH HOUSE FOR FIXED INCOME
4CAST
BBSP
FuturesTechs
Informa Global Markets
Market Chartist
MNI
WINNER: Market Chartist (Steve Miley, Director)
RUNNER-UP: FuturesTechs

INDEPENDENT RESEARCH HOUSE OF THE YEAR
4CAST
BBSP
FuturesTechs
Informa Global Markets
RANsquawk
Trading Central
WINNER: BBSP (Jean-Charles Gand, Senior Technical Strategist)
RUNNER-UP: Trading Central

BEST SPECIALIST RESEARCH
Citi (for CitiFX Technical Teams "technamentals")
Finex (for their FinCURVE product)
Kase and Company (for Kase Hedge Service)
MTS Research (for their Japanese Service)
Pivotfarm (for their "Technical Confluence")
RavenPack (for their news analytics research)
WINNER: MTS Research (Peter Beuttell, Director)
RUNNER-UP: Finex

Products & Software Finalists:

BEST SPECIALIST PRODUCT
Deltix (for their Deltix Cloud Service)
FFastFill (for their SPREADINTELLIGENCE trading tool)
NetDania (for their FX rates & charts mobile apps)
Recognia (for their pattern recognition software)
Sentient Trader (for their Hurst Cycles based trading software)
TraderMade (for their "InterpreTA" service)
WINNER: FFastfill
RUNNER-UP: Recognia

BEST DATA PROVIDER
Activ Financial
Bloomberg
CQG
eSignal
Thomson Reuters
WINNER: Bloomberg
RUNNER-UP: Thomson Reuters

BEST SPECIALIST DATA PROVIDER
Deltix (for their Deltix Cloud Service)
OneMarketData (for their OneTick data management solution)
RavenPack (for their news analytics data)
RIMES (for their Benchmark Data Service)
Thomson Reuters (for their news analytics data)
WINNER: RavenPack
RUNNER-UP: Thomson Reuters

BEST AUTOMATED TRADING PRODUCT: EXECUTION
Deltix
EBS (ICAP plc)
FlexTrade Systems
MTS Markets
Portware
Progress Software
smartTrade Technologies
WINNER: Deltix
RUNNER-UP: smartTrade Technologies

BEST AUTOMATED TRADING PRODUCT: STRATEGY DEVELOPMENT
Deltix
FlexTrade Systems
Progress Software
QuantHouse
Tethys Technology
Tradesignal
Trading Technologies International
WINNER: Deltix
RUNNER-UP: QuantHouse

BEST TECHNICAL ANALYSIS PLATFORM
Bloomberg
CQG
Thomson Reuters
TraderMade
Tradesignal
Updata
WINNER: Bloomberg
RUNNER-UP: Thomson Reuters

Other Awards:

BOOK OF THE YEAR
Why Financial Markets Rise Slowly but Fall Sharply (Paul Azzopardi, Harriman House)
Investing with Volume Analysis (Buff Dormeier, FT Press)
The Definitive Guide to Point and Figure (Jeremy du Plessis, 2nd edition, Harriman House)
Technical Analysis (Charles Kirkpatrick and Julie Dahlquist, 2nd edition, FT Press)
The Trading Methodologies of W.D Gann (Hima Reddy, FT Press)
Market Sense and Nonsense (Jack Schwager, Wiley)
WINNER: Investing with Volume Analysis (Buff Dormeier, FT Press)
RUNNER-UP: Technical Analysis (Charles Kirkpatrick and Julie Dahlquist, 2nd edition, FT Press)

TECHNICAL ANALYST OF THE YEAR
Richard Adcock (UBS)
Peter Beuttell (MTS Research)
George Davis (RBC Capital Markets)
Jean-Charles Gand (BBSP)
Martin Jones (Informa Global Markets)
Peter Lee (UBS)
Steve Miley (Market Chartist)
Riccardo Ronco (Aviate Global)
David Sneddon (Credit Suisse)
WINNER: George Davis (RBC Capital Markets)

Finalists, Runners-Up & Winners >


Thank you to our judges for their considerable time and effort: Ernest Chan (E.P. Chan & Associates), Matthew Clements (Editor, The Technical Analyst), James Clunie (Investment Director, Scottish Widows Investment Partnership), Andrew Harvell (Managing Director of Quantitative Research, FTSE Group), Avi Hooper (Portfolio Manager, Invesco), Alain Ruttiens (Asset Manager, NEURON sarl), Rashpal Sohan (Rathbones), Oleg Svirschi (Systematic Prop Trader, Bank of Tokyo-Mitsubishi UFJ) and Stacy Williams (Head of FX Quantitative Strategy, HSBC).

T: +44 (0)1483 573150 E: enewsletter@technicalanalyst.co.uk

© 2013 Global Markets Media Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by an means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of Global Markets Media Limited. While the publisher believes that all information contained in this publication was correct at the time of going to press, they cannot accept liability for any errors or omissions that may appear or loss suffered directly or indirectly by any reader as a result of any advertisement, editorial photographs or other material published in The Technical Analyst eNewsletter. No statement in this publication is to be considered as a recommendation or solicitation to buy or sell securities or to provide investment, tax or legal advice. Readers should be aware that this publication is not intended to replace the need to obtain professional advice in relation to any topic discussed.