The picture from Space that shows why Commodities are non-correlated to the Stock Market:
Right about now, you’re sitting there thinking: How on earth does this weather picture of the Wyoming & South Dakota have anything to do with stocks not being correlated to commodities? Well, the storm ended up killing tens of thousands of cattle in South Dakota because they hadn’t grown their winter coats yet. That came out to be 15 to 20% of cattle in South Dakota. But how does this prove stocks are non correlated to the stock market?
Weekend Reads
If something is newsworthy, but nobody reports on it or talks about it, is it still “news?” We ask ourselves this question today, as earlier this morning; the CME tweeted about a power surge cutting off phone and internet service on the trading floor. If anyone had any doubts about floor trading versus electronic trading, this shows it’s really no contest these days. Plus, the Sequester is to blame for CFTC Furloughs, and Jon Stewart provides brilliant commentary on JP Morgan.
Chart of the Week: Volatility Volume Visualization
Our apologies for the cheesy alliteration… it burns, but we couldn’t resist. Our chart of the week looks at a line rising faster than TSLA or NFLX – it’s VIX options. The VIX Options are at all time highs in terms of volume… breaking through the old record set at the beginning of the year.
Managed Futures Linkfest
In this week’s edition of Managed Futures Linkfest, the rebuttals/responses to Bloomberg bashing of Managed Futures are still flowing, David Harding on Winton talks Market Momentum with his lovely British accent, and an update on AlphaMetrix. Futures under Fire – (The Dan Collins Report) Cliff Asness: Leverage. Derivatives. Shorting. – (WealthTrack) AlphaMetrix ordered to repay […]
The US Dollar/Euro Currency Bat Signal
We don’t know what this “Bat Pattern” in the US Dollar and Euro Currency means so close to Halloween, but it’s got us a little scared/happy (depending on if long or short the Euro). It’s probably a reminder to talk about the Euro’s negative correlation to the U.S Dollar index, and the history of the two.
Disclaimers
Managed futures, commodity trading, forex trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. You should not rely on any of the information as a substitute for the exercise of your own skill and judgment in making such a decision on the appropriateness of such investments.
The entries on this blog are intended to further subscribers understanding, education, and – at times – enjoyment of the world of alternative investments. Unless distinctly noted otherwise, the data and graphs included herein are intended to be mere examples and exhibits of the topic discussed, are for educational and illustrative purposes only, and do not represent trading in actual accounts. Opinions expressed are that of the author.
The mention of specific asset class performance (i.e. +3.2%, -4.6%) is based on the noted source index (i.e. Newedge CTA Index, S&P 500 Index, etc.), and investors should take care to understand that any 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.
The performance data for various Commodity Trading Advisor (“CTA”) and Commodity Pools are compiled from various sources, including Barclay Hedge, 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.
The mention of general asset class performance (i.e. managed futures did well, stocks were down, bonds were up) is based on RCM’s direct experience in those asset classes, estimates of performance of dozens of CTAs followed by RCM, and averaging of various indices designed to track said asset classes.
The mention of market based performance (i.e. Corn was up 5% today) reflects all available information as of the time and date of the publication.
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Managed Futures Disclaimer:
Past Performance is Not Necessarily Indicative of Future Results. The regulations of the CFTC require that prospective clients of a managed futures program (CTA) receive a disclosure document when they are solicited to enter into an agreement whereby the CTA will direct or guide the client’s commodity interest trading and that certain risk factors be highlighted. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA.
See the full terms of use and risk disclaimer here.
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