Sunday, June 28, 2009

Collecting Volatility

We had a huge snapback rally in April following the sharp decline into March. Since that time, stocks have been generally calm with a slight upward trend. This "calm" market action has released some of the "fear" in the marketplace. May was up around +8%; while June is currently down -2.5%. This has allowed us to collect volatility in the marketplace over each of the last two months.

Premium Members who used our approach of "collecting volatility" had some good diversification for their stock portfolios these past few months. This system collected near the expected maximum of around 4% in both May and June.

Monday, June 15, 2009

Futures Sectors

We invest -- and trade -- in the major liquid futures markets, focusing on the US markets. Note that we have also traded international commodities such as London metals and Japanese Commodities (Tocom Rubber, Azuki Red Beans). Recently, we mentioned that many of these sectors have become correlated with the stock market during this recent sustained equity rally. Traders in these markets are probably aware of this -- but should make special note of this to avoid having undue concentrated risk in their portfolios.

Here is a look at the major futures market sectors in which we invest. We like to use the word "invest" because we believe that we extract risk premiums that are left in the marketplace by hedgers and other market participants.
  • Stock Index Futures
  • Interest Rates
  • Currencies
  • Metals (precious metals and industrials)
  • Energy
  • Grains
  • Meats
  • Soft Commodities (coffee, cotton, sugar, OJ, cocoa)