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Managed Futures June Up- Trend Following

Finally there was a Strong month for managed futures in June which puts the YTD return positive for the majority of CTAs. This year for managed futures & trend following has been typically tough. The year started off strong and then the returns were given back. This is typical of trend following and managed futures. It is never easy. One has lumpy returns at best. There is no 45 degree equity curve. Trend following has countless challenging periods.

Examples of CTA performance
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PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS IN TRADING COMMODITY FUTURES, OPTIONS, AND FOREIGN EXCHANGE (“FOREX”) IS SUBSTANTIAL.

Commodity Trading involves high risks and you can lose a significant amount of money. Commodity trading is not suitable for many investors. Any performance results listed in all marketing materials represents simulated computer results over past historical data, and not the results of an actual account. All opinions expressed anywhere on this website are only opinions of the author. The information contained here was gathered from sources deemed reliable, however, no claim is made as to its accuracy or content. Different testing platforms can produce slightly different results. Our systems are only recommended for well capitalized and experienced futures traders.

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Multiple Entry Options when Trend Following

The hard part is the experience. The next hard part is there are so many stocks to chose from. One should focus on the strongest stocks in the strongest sectors. Cherish market pull backs as they provide the entries. Installed Building products had numerous entries. From a fundamental point, very strong with earnings.

Look at below chart. Had a Livermore Shakeout plus 3, W pattern, sloping trend lines and even a highest high trend following break out…

installed

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This time is different- Trend Following

“This time is different”

History repeats but always not in the same fashion: we have had unprecedented stimulus, a free spending administration, record federal debt level, etc. History tells us however, if we reflect on past decades, that there are always “seemingly” unprecedented occurrences that “have never happened before” in each decade.

The S & L (Savings & Loan Associations) crisis and bailout a couple of decades ago is another example. Living in Miami just finishing college saw first hand the carnage. In the 1980’s and 1990’s 1,043 of 3,243 savings and loan associations failed. Ultimately, half of them failed. The FSLIC, similar to today’s FDIC, was bankrupted. The answer, a government bailout of course! There was no other alternative.

This time can be different….but have a complete trend following trading plan

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Gold Going to 10,000 ???- Trend Following #GDX

I am sure every newbie investor would love to jump on the gold bandwagon when some guru would state gold is going to 2,000…5,000 or 10,000. These gurus have made calls and some have worked and some have not. The ones who foolishly bought into their calls have lost money. Losing money is one thing, the frustration is worse. When trend following ( which is never easy) I would much prefer to know why I am buying or selling something…gold included. I diminish my frustration to some point by having a plan with thought our rules that are understandable and rather simple to follow. BTW trend following does not have be complicated with zillions of trend following rules. The key for a successful trend follower is to have rules and a routine. Without this you have nothing…but frustration.

Do not get me wrong, it is easy to get frustrated also when you have 10 trades in a row that do not work. This is the reality. I have been there countless times and the only saving grace is I “try” to keep these loses small and allow myself to be available when there are moves….

I have been in both trades GC an GDX…Both are interesting….I have no idea if they will go to X thousand or X dollars…the key is to have a complete trend following plan…

gdx

gold

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS IN TRADING COMMODITY FUTURES, OPTIONS, AND FOREIGN EXCHANGE (“FOREX”) IS SUBSTANTIAL.

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Eurekahedge Trend Following Index CTA/managed futures up 5.96% June

Eurekahedge is a data base of various investment strategies based in Singapore. Eurekahedge reported stellar results for CTA & managed futures strategies for June. ◾CTA/managed futures funds topped the tables across strategic mandates for June and 1H 2016, up 3.30% and 4.33% respectively. As of 1H 2016, net inflows into the strategy have come in at US$7.2 billion, down from US$24.2 billion over the same period in 2015. This sounds impressive however the last several years have been the hardest for trend following CTAs in the managed futures space. Many have quit as draw downs got worse and extended.

Personally my trading was one of the toughest I ever went through. It is very true the statement…

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS IN TRADING COMMODITY FUTURES, OPTIONS, AND FOREIGN EXCHANGE (“FOREX”) IS SUBSTANTIAL.

One needs to have the discipline, fortitude and believe in their trading plan that matches their personality…

Eurekahedge trend following statistics

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PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS IN TRADING COMMODITY FUTURES, OPTIONS, AND FOREIGN EXCHANGE (“FOREX”) IS SUBSTANTIAL.

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PAR Pacific – Sam Zell Value Play Trend Following

I have to admit Sam Zell is one investor I truly respect & watch. He called the top in real estate prior to the crash in 2007-2008. Today he is seeking assets below replacement cost similar to what he did in the field of real estate in the 1970s & 1980s. Buy when everyone was selling. Buying value.

I believe in being a value trend follower. I recently came up with one of his holdings PARR Pacific.

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As you can clearly see this is stock is in a deep down trend. However there is value here according to Sam Zell.

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I am not a knife catcher. I have exact rules in order to try to buy this stock once it turns up…if it turns up. No one is perfect! There are no gurus!

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Power of Sloping Trend Lines When Trend Following

I use sloping trend lines as entries and to confirm the trend. In the case of Match Group $MTCH look at the sloping trend line as it hits all time highs….

mtch

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$EBIX Trend Break out

With the SP 500 at all time highs….we are seeing some stocks break out…
EBIX is one of them

ebix

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$BLD All Time New High

All time new highs are things trend followers like to see!!!

bld

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Head and Shoulders Pattern on Crude Oil #USO

Head and Shoulder patterns are patterns that Trend Followers look for. As much as crude is up today, it questions the rally in many crude stocks. In the below diagram you will see the shoulders and head. I drew a line which was crossed yesterday….

Will be interesting to see where crude stocks go from here…

crude

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