In 2012, it seemed like every trend in the markets that took hold reversed at the worst possible time – giving trend followers a month or so of good returns before wiping out their open trade profits (and then taking some extra skin off, for good measure). We’ll have more on that next week with our 2012 performance review, but suffice it to say it many trend followers struggled during the snapbacks of the last year.
Thus, we were a little nervous this week when one of the bigger trends of the moment – the falling Yen – looked like it was getting ready for just such a bounce. After multiple trend followers we watch getting short the Yen, this week started off with a bounce up 1.74% from Monday’s low to Wednesday’s high (Disclaimer: past performance is not necessarily indicative of future results). If this bounce stuck, as so many did in 2012, it could have left several trend followers with a disappointing start to 2013.
Fortunately, that bounce hasn’t stuck, and the Yen has resumed the downward course begun in October:
Disclaimer: past performance is not necessarily indicative of future results.
Several CTAs we follow, including Mark Walsh, Covenant, and Briarwood, are all enjoying this short trend in the Yen. And the longer the Yen stays low – even if it doesn’t go any lower – the better for trend followers. As we put it in our newsletter following the big multi-market downturn last May:
Every day that goes by and puts more time between managed futures short entries and the current date, systematic programs are moving their exit points down, reducing the risk from entry on the trade, and – if they are lucky enough – locking in profits.
Here’s hoping the Yen downtrend continues to cooperate, and starts 2013 off on the right foot.
The performance data displayed herein is compiled from various sources, including BarclayHedge, RCM's own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.
Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.
Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.
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