Big “Risk Off” Day in the Markets…

If you happen to be consuming news this morning, you couldn’t miss the breaking news graphic dominating the screen, as the media extensively reported on the dive in the markets. You can tell it’s been a bad day when Speaker of the House John Boehner makes a point to comment on a bad market day. The Dow Jones Industrial is down over 200, the S&P 500 dropped below 1600 at one point, and commodities are taking a beating. Largest movers include Silver – 8%, Gold -5.75%, Coffee – 4.60%, Crude – 2.75%, Corn -1.30%, and Soybeans -1.00%. In case you want a visual representation, this sea of red should do the trick.

Courtesy: Finviz.com

If you noticed, the only green you see is coming from the U.S. dollar, but it’s only up slightly. Is there a reason for the madness? Markets are down big across the board on the heels of comments from Fed Chairman Ben Bernanke that the Federal Reserve may start pairing quantitative easing later this year.

So what do the people invested in long-only commodity ETFs think when they see these moves? Do they ignore them?  Do they think it’s just a temporary setback on the commodity supercycle highway? As we talked about in a recent newsletter, we just don’t get it. It’s like buying a car that doesn’t go in reverse… You have the pleasure of going fast, but a crash is almost certain.

As for managed futures, the end of QE could be just what the doctor ordered. CTAs, and trend followers in particular, have been lamenting the lack of directional volatility in the markets for years now. If a QE-ending downturn amps up overall volatility – we hope managed futures strategies are prepared to step up to the plate and provide the crisis protection they are known for.

One comment

  1. Is very simple, Elliot wave – 3 wave on DJI and SP500

    SP500 first stop at 1562, later target 1382

Write a Comment

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, 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.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, 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.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.