Whenever we need a pick me up or something to brighten our day, the underperformance of commodity ETF’s usually does the trick. But the ETF’s have held in there remarkably well so far this year against a simple strategy of buy and hold the December futures contract and roll it annually (down just 26 basis points on average). The real story, however, is the underperformance of either long only strategy.
Category: Markets
29
Aug
2013
Finviz: We Love You, You’re Perfect, Now Change
Dear Finviz, Whenever we need a quick glimpse of the futures markets, we know we can count on you. But as we’ve mentioned, the futures side needs some work. For instance, you’re missing some of the most heavily traded contracts in the world, by only displaying two Bond futures markets. If we can be so bold – we’ve come up with an alternative layout which would do just the thing. What do you think about adding these new markets and adjusting the layout! This user, for one – would be an even more loyal fan!
22
Aug
2013
Goldfinger, Gold iPhone, and Gold Backwardation!
Our society hasn’t lost its obsession with that shinny medal just yet. First Apple is in talks of a gold iPhone, and a great piece on Slate’s Blog MoneyBox talking about the political and economic undertones on the James Bond Classic: Goldfinger. Was this a classic Bond film with the ejector seat car, or a movie about the Bretton-Woods system of semi-fixed exchange rates restricting British citizens from buying and storing large quantities of gold. The piece draws some eerie parallels with today, noting that Labour Party Prime Minister Harold Wilson.
21
Aug
2013
EuroDollars: the Biggest Market You’ve Never Heard of
What’s the most common futures market in nearly every managed futures portfolio we run across? The Eurodollar. While many mistake it as the official currency of the European Union, it actually refers to the US dollars deposited abroad. EuroDollar futures contracts are derivatives on the interest rate paid on those deposits. So why are million’s of these contracts being traded a day?
16
Aug
2013
Zilmax doing zilcho to Cattle futures?
Organic food lovers and animal rights activists alike are celebrating after a domino effect of large players doing away with the growth inducing drug Zilmax, partially because the cattle were so big they struggled to move. While this hasn’t effected cattle futures, one meat trader we work with put in a position due to the news. Here’s the logic behind it all.
15
Aug
2013
Asset Class Scoreboard: July 2013
We’re half way through August, but it’s worth looking back at how the asset classes stacked against each other in the month of July. Managed Futures remains in the middle of the pack, but its still positive YTD. Meanwhile, stocks make big gains, and commodities are no longer in last place.
08
Aug
2013
Who’s Meddling with Metals?
Don’t look now, but it appears as though everyone’s favorite sector, metals, is on the move in a major way. Of course all these metals are down major from their all time highs two years ago, meaning this could be just a ‘dead cat bounce’
07
Aug
2013
If a Cow gets sick in New Zealand?
So you think you want to trade currencies. You better be up to date on the butterfly effect, or in this case – the Cow effect. earlier this week, China banned milk from New Zealand because of bacterium that could cause botulism. The news was enough to send the New Zealand Dollar down around 1%, leading headline grabbing Business Insider to declare “Dairy Scare Is Causing Chaos For The New Zealand Dollar.” But is the milk actually the cause of the chaos, and it is actually chaos to begin with?
06
Aug
2013
The ‘Problem’ with Liquid Alternatives – in one nice Table
Adding ‘alternatives’ to your portfolio has never been as easy as today with the plethora of so called ‘liquid alternatives’, or mutual funds specializing in alternative investments such as mutual funds, which has made it even easier to separate the naive from their money. Principal Group explains all you ever need to know about managed futures in your portfolio in just a couple sentences. (heavy on the sarcasm).
06
Aug
2013
Forget the VIX – look at Global Market Volatility
Our friends at Chadwick Investment Group are out with a short research piece talking about how the VIX doesn’t really get the job done for analyzing whether the volatility environment is good or bad for managed futures:. The rest of their piece is a nice ‘back to the basics’ look at how volatility in multiple markets affects trend following returns, including some charts showing global volatility back near pre-crisis 2007 levels. Here’s to hoping that is a spring being loaded up with tension about to pop like it did in 2008…
