Posts Tagged ‘risk parity’

Notes From Underground: A Few Quick Points

November 12, 2017

Two things to think about as the new week begins. The German DAX put in a very rare technical formation as the futures made all-time highs last week and closed below the previous week’s LOWS by almost 0.75%. We have seen this formation in the S&Ps and Nasdaq 100 this year, which¬† resulted in some momentary weakness in the stock markets. Every pundit on CNBC and Bloomberg has pushed the European equities as the better choice for developed market investors but this new signal raises a caution flag. So caution it is until we see if the market can follow through.

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Notes From Underground: Trading Strategies For An Automated World

October 10, 2017

Yesterday, I sat down with the group TOPSTEP TRADER to discuss ways I prepare to trade. Topstep is a private group that educates/prepares potential traders for a profitable existence. As the fourth quarter has begun, I thought this video would be beneficial as a review for my readers. Reviewing rules and concepts are important, especially as I BELIEVE WE ARE HEADING INTO A PERIOD OF INCREASED VOLATILITY. A rise in market volatility can be a time of great profit but it comes with a major increase in risk. The complacency of the market because of the central banks continued intervention coupled with the risk selling of the risk-parity crowd. I say crowd because it is not just AQR and Bridgewater involved in risk parity but there are many volatility sellers piggy backing on the power of the largest market players. Remember, when George Soros/Druckenmiller broke the Bank of England in September 1992, it wasn’t just Soros but many of the banks servicing Soros were tailcoating the Quantum Fund. But when the elephants leave the drinking hole many denizens of the jungle get crushed (Niederhoffer).

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